Struggling South Okanagan real estate market rebounds in June

Struggling South Okanagan real estate market rebounds in June

New report by real estate board shows rebound of local housing market in June 2020

Sales of residential homes in the South Okanagan decreased by 24 per cent in the second quarter of 2020, compared to the same period in 2019, however, sales are on the rise again.

A new report by the South Okanagan Real Estate Board highlights this positive housing market growth, which occurred in the month of June.

In total there were 407 residential transactions in the second quarter of 2020, equaling a 24 per cent decline compared to 2019. Townhome sales decreased by 51 per cent while the sale of single-family homes dropped by 26 per cent during that period.

Sales rebound in June

However, the real estate board saw a rebound of sales in June, with 213 residential sales, a 27 per cent increase compared to the same period in 2019.

“With the COVID-19 pandemic approaching four months, most businesses have reopened and economic activity is on the rise. The South Okanagan tourism industry is rebounding as travellers look for safer holiday alternatives,” reads the report by the real estate board.

This influx of visitors, the board explained, is giving households the confidence to move ahead with their real estate decisions.

Limited inventory, prices increase

The South Okanagan region is, however, experiencing a limited inventory of homes for sale. There were 585 single-family homes for sale in the region in June 2020, a two per cent decline compared to May, and a 28 per cent increase compared to 2019.

Just 15 single-family homes have been delivered to the market so far this year, and 102 remain under construction.

Average home prices have increased by 15 per cent since second quarter in 2019. The average selling price for a single-family home in this region during the second quarter this year was $622,451. Townhouses and apartments increased in price by four per cent.

Prices by region

Summerland topped the charts with the highest average single-family home sale price, at $857,754, a 10 per cent increase since 2019. The Kaleden/Okanagan Falls region was close behind at $841,600, a 67 per cent increase since last year.

Naramata was third with the average single-family home selling for $777,500.

Keremeos, Oliver, Osoyoos and Penticton all average within the 500 to 600-thousand-dollar range.

Housing prices are lowest in Princeton, with the average single-family home selling for $365,393, an 18 per cent increase since last year.

Osoyoos was the only market in the South Okanagan where homes decreased in value, by 18 per cent.

(Story continues below)

Economic overview and housing market analysis. [South Okanagan Real Estate Board]

Outlook for the future

Rising home prices and changes to public policies in terms of loans (higher minimum qualified credit score), the board explained, has led to dampened affordability in the South Okanagan.

In addition to a higher minimum qualified credit score, changes to Canada Mortgage Housing Corporation’s policies include a minimum $133,154 household income to qualify for an insured mortgage in this region, compared to $106,199 pre-COVID-19.

The board predicts that the pandemic will likely accelerate the trend of families moving away from highly dense and costly jurisdictions, such as the Lower Mainland.

Buyers who were expecting severe declines in princes due to the pandemic will likely ‘pull the trigger’ on a purchase as market declines failed to materialize, explained the board. Additionally, interest rates near historical lows, they predict will help re-activate the market going forward.

“While there are reasons to be cautiously optimistic, there remains a considerable amount of uncertainty going forward,” said the board. “Household incomes have held up reasonably well as governments have injected billions into the economy and financial institutions have allowed for payment deferrals, yet, these stimuli are expected to be temporary.”

The board predicts that a potential second wave of COVID-19 could impact the pace of the market’s recovery, and further weaken the housing market. \

READ MORE: Another $1 billion borrowed for B.C. municipalities, transit

READ MORE: Snapshot: Seven-year-old boy recognized for rescue on Shuswap Lake

@PentictonNews
editor@pentictonwesternnews.com

Like us on Facebook and follow us on Twitter.

Real estate

Just Posted

This Doughnut of society and planetary boundaries from Doughnut Economics is described as a compass for human prosperity in the 21st century, whose goal is to meet the needs of all people within the means of the planet. (Kate Raworth and Christian Guthier image. CC-BY-SA 4.0)
P0st-pandemic: Shuswap resident puts focus on how community can thrive

Groups hire expert to find path for city to recovery and sustainability

Michelle Jacobs receives her first dose of the COVID-19 vaccine at the Coast Capri Hotel on April 28, 2021. The pop-up clinic was hosted by the First Nations Health Authority. (Aaron Hemens/Capital News)
126 new cases of COVID-19 in Interior Health over the weekend

There are 22 individuals hospitalized due to the virus, and 13 in intensive care

Vernon local Ryan Lazar – who specializes in 2D background design and 3D animation – is ready to start his career after a tough yet rewarding two years of studies. (Contributed)
Okanagan College students get animated at graduation

‘The pandemic has resulted in more video consumption and the animation industry is so hot right now because of it’

Salmon Arm RCMP seize a handgun, drugs and cash at a Silver Creek property on Friday, May 14, 2021. (File photo)
Police seize handgun, drugs and cash at a Shuswap property

Salmon Arm RCMP said warrant for Silver Creek revealed cannabis, possible cocaine, magic mushrooms

Salmon Arm RCMP are seeking witnesses to a single-vehicle collision that occurred on Highway 1 on May 16, 2021. (File photo)
Salmon Arm RCMP seek persons who transported injured driver, motorcycle to hospital

Motorcyclist involved in a single-vehicle collision on Highway 1

An avalanche near Highway 1 in Glacier National Park. Avalanche Canada will benefit from a $10 million grant from the B.C. government. (Photo by Parks Canada)
Avalanche Canada receives $10-million grant from B.C. government

Long sought-after funds to bolster organization’s important work

Barriere RCMP nabbed two suspects who were allegedly breaking into cabins in McLure. (File photo)
Thieves nabbed by Barriere Mounties during McLure break-ins

Police Service Dog Kody instrumental in making the arrest

(File photo)
Repeated cougar sighting on Okanagan Rail Trail

Plenty of bear sightings around the valley too

B.C. Health Minister Adrian Dix and provincial health officer Dr. Bonnie Henry update the province’s COVID-19 vaccine program, May 10, 2021. (B.C. government)
B.C.’s COVID-19 infection rate stays below 500 a day over weekend

14 more deaths, down to 350 in hospital as of Monday

Royal Bay Secondary School’s rainbow crosswalk was vandalized shortly after being painted but by Monday, coincidentally the International Day Against Homophobia, Transphobia and Biphobia, the crosswalk had been cleaned up and students had surrounded it with chalk messages of support and celebration. (Zoe Ducklow/News Staff)
B.C. high’s school’s pride crosswalk restored following ‘hateful’ graffiti attack

Hate terms, racial slur, phallic images spray-painted at Greater Victoria high school

RCMP vest
Penticton beach brawl results in one arrest but no charges

People took to social media after a fight broke out at the fire pits at Okanagan Lake Saturday

Terrance Mack would have celebrated his 34th birthday on May 13, 2021. Mack’s family has identified him as the victim of a homicide in an apartment on Third Avenue in Port Alberni sometime in April. (SUBMITTED PHOTO)
Family identifies Ucluelet man as victim of Vancouver Island homicide

Terrance Mack being remembered as ‘kind, gentle’ man

A single motorcycle parked outside of the Kelowna Hells Angels clubhouse at 837 Ellis Street on July 9, 2020. (Michael Rodriguez - Capital News)
Kelowna Hells Angels prospect sentenced to 9 months in jail for aggravated assault

Colin Michael Bayley pleaded guilty to the downtown Kelowna assault earlier this month

Vernon Search and Rescue, along with Shuswap members, rescued three kayakers near Lumby Sunday, May 16, 2021. (VSAR Instagram)
3 kayakers rescued in North Okanagan

Shuswap, Vernon search and rescue teams make swift-water rescue Sunday

Most Read