Kelowna Home Prices Are DOWN 14% | Kelowna Real Estate Update October 2024

Kelowna Real Estate Update October 2024: What 14 Months of Inventory Means for Buyers and Sellers
Kelowna's real estate market is firmly in a buyer’s market. With 14 months of inventory available, this means that only 1 in every 14 properties listed is selling in a given month, leaving 13 out of 14 unsold. Naturally, this leads to a critical question: What does this mean for prices, and how should you position yourself to succeed in today’s market? Let’s break it down.

Kelowna’s Current Market Trends

The benchmark price for a home in Kelowna has dipped 14% from its peak two years ago. However, despite high inventory and lower-than-average sales, prices have started to stabilize. There is some resistance to a further decline, indicating that while the market is slow, the bottom may be near.But let’s take a closer look at the numbers.

Sales are down 12% year-to-date compared to last year, despite several interest rate cuts by the Bank of Canada.
The number of available properties is up by 36% year-over-year, with over 4,000 listings.

Despite these shifts, prices haven’t dropped significantly—yet. This is because it takes time for high inventory to exert downward pressure on pricing, particularly in the single-family home market. Prices have stabilized, but we may need more time in this buyer’s market before we see significant price reductions.

The Impact of Market Changes on Home Prices

Single-Family Homes

The benchmark price for a single-family home in Kelowna remained virtually unchanged from August to September, with only a $100 difference. Year-over-year, it has even gone up slightly. This trend might seem surprising in a buyer's market, but it’s a clear indication that the market has stabilized after the sharp drops we saw in 2022 and early 2023.Although prices dropped nearly 14% from the peak in 2022 and another 5.4% from the summer of 2023, they have increased 4.7% in 2024, stabilizing over the past few months.

Townhomes

The townhome market shows a similar pattern. Prices increased by 0.3% from August to September but are still down 4.7% year-over-year, with a current benchmark price of $725,000. The townhome market has been volatile, but much like the single-family market, prices are stabilizing.

Condos

Condo prices also remained unchanged from the previous month, with a 4.6% year-over-year increase. Interestingly, while the benchmark price remains stable, the average condo price is lower, sitting at $460,000. This suggests that most sales are happening below the benchmark price, indicating more affordable options for buyers.

How Long Are Homes Taking to Sell?

On average, homes in Kelowna are taking longer to sell:

Single-family homes: 56 days
Townhomes: 63 days
Condos: 57 days

Homes are selling at 96% of their asking price, meaning buyers are negotiating about 4-5% off the list price on average. With 14 months of inventory for single-family homes, 11 months for townhomes, and 8.5 months for condos, we are deep into a buyer’s market.

Why Prices Haven’t Dropped More (Yet)

Given the high inventory, why aren’t prices falling faster? It comes down to time. It takes a sustained period of oversupply to create significant downward pressure on prices, and we haven’t been in this buyer’s market long enough to see that level of price correction. While prices have stabilized, the potential for further drops exists if inventory continues to outpace buyer demand.

Is Now a Good Time to Buy?

For buyers, there are reasons to consider entering the market now. The 5-year CMHC insured fixed mortgage rate has dropped from 5.79% to 4.39% year-over-year. If you qualify, that’s a savings of about $400 a month on the benchmark price of a single-family home.For those looking for homes below the benchmark price, there are even more savings, both on purchase price and interest costs.

What to Do if You’re Selling in a Buyer’s Market

Selling in a buyer’s market is tough, but not impossible. To succeed, you need to focus on the 3 P’s of selling: Product, Promotion, and Price.

Product: Ensure your home is in top condition. Declutter, clean thoroughly, and tackle any small repairs that could detract from your home’s appeal. Consider a fresh coat of paint or staging to maximize your home's presentation.
Promotion: Work with a real estate agent who knows how to market effectively. Simply listing your home on MLS isn’t enough. Ensure your agent is using professional photography, videography, and a robust social media strategy to get your home in front of as many potential buyers as possible.
Price: Be realistic. In a buyer’s market, you need to be competitive. If your home isn’t priced in the top 3 of similar properties, you’ll struggle to get showings, let alone offers. Make sure your pricing reflects your desire to sell, not just test the waters.

Conclusion

Kelowna is firmly in a buyer’s market, but that doesn’t mean homes aren’t selling. Prices are stabilizing, and the market could shift if buyer demand picks up. Whether you’re buying or selling, now is a critical time to stay informed and make strategic decisions.If you’re thinking about buying or selling in Kelowna, reach out to me for a discovery call. Let’s discuss how you can navigate this market and achieve your real estate goals.