Kelowna home prices continue to fall

Kelowna's housing market is undoubtedly cooling and slowing.

"A number of factors, or even a combination of factors such as interest rate hikes, recommencement of travel and the school break could all be reasons consumers pushed pause on their real estate plans," said Lyndi Cruickshank, president of the 2,500-member Association of Interior Realtors.

"Seasonally, it is not out of the ordinary to see a dip in sales in the summer, although real estate market activity across most regions in the province was below average last month, not just within the Interior."

In Kelowna, last month, compared to July 2021, sales plunged 47% each to 124 for single-family homes and 52 for townhouses and plummeted 52% to 85 for condominiums.

While benchmark selling prices in July are all up from the same time last year for single-family homes, townhouses and condos, the real story is what's happened in the last three months.

After a buying frenzy pushed home prices to record-highs in April, a slide started, prompted by increasing mortgage interest rates, inflation and the market collectively taking a breather after the incredible run-up made everything unaffordable.

In July, the benchmark selling prices of a typical single-family home was $1,060,400, down $51,600 from June's $1,112,000 and a $71,600 drop from the record-high $1,132,000 in April.

For townhouses, the July benchmark was $783,500, which is actually up $19,700 from June's $763,800, but down $45,500 from the record-high of $829,000 in May.

When it comes to condos, the July benchmark was $522,100, a $15,100 slip from June's $537,200 and a $34,900 slide from the record-high $557,000 in April.

Definitely gone are the days of market peak January and February when homes for sale attracted bidding wars and sold for over list price.

Another sign of a slowing market is the average number of days a home is listed for sale before being purchased.

For single-family homes in July that was 37 days, up 22% from 29 days last year, for townhouses 33 days up 26% from 24 and for condos 36 days up only 2%.

"We are seeing inventory (number of homes for sale) accumulate, slowly moving upward to healthier levels of inventory, which is a welcomed relief for prospective buyers," said Cruickshank.

"However, the higher mortgage interest rates are still impacting the real estate market with some home buyers finding it more difficult to qualify for mortgages. Hopefully, we will see fixed mortgage rates come down and bring some relief for buyers, particularly first-time buyers. Any interest rate relief may see an increase in sales activity returning to the market over the fall months."