House prices tumble in Kelowna as buyers took spring and Easter breaks

Hmmmm....

The Kelowna housing market was supposed to be on an early-spring tear.

However, the latest data shows home prices in the city slipped in March.

Yet, sales volume did pick up -- at least for part of the month.

"Despite a relatively strong start in March, sales activity tapered off about mid-way through as spring break and Easter plans likely had buyers and sellers preoccupied," said Kaytee Sharun, president of the 2,600-member Association of Interior Realtors.

"It isn't surprising, given that March is typically a staggered month when it comes to market activity."

Last month, the benchmark selling price of a typical single-family home dipped below $1 million again -- $986,600 to be exact -- down from $1,009,100 in February.

The prices has fluctuated just above and just below the magical $1 million mark for the past year and a half.

The record-high benchmark was $1,131,800 in April 2022 as the market boomed post-pandemic before runaway inflation, higher mortgage interest rates and jittery consumers forced a downturn in housing sales and prices.

In March, 131 single-family homes changed hands, a bump from 106 in February.

For townhouses, there were 60 sales in the Central Okanagan in March, up from 41 in February.

However, the benchmark price didn't follow that hike with the typically selling price for a townhouse at $719,600 last month, down from $754,900 in February.

The townhouse benchmark peaked at $829,000 in May 2022.

Speaking of record-highs, for typical condos that was $557,700 in April 2022.

Since then, the benchmark has slid and juttered and was $496,000 last month, down from $508,600 in February.

In Kelowna, last month, there were 81 condo sales, up from 64 in February.

However, compared to March 2023, sales last month were down about 22%.

While prices are down in all three categories, Kelowna is by no means becoming more affordable.

In fact, it remains unaffordable for many because home prices are still historically high, incomes haven't kept up with the rapid rise in home prices and mortgage interest rates are more than double what they were two years ago.

However, the provincial government is trying to make it more affordable for first-time buyers by eliminating the property purchase transfer tax of $8,000 on the first $500,000 of a home purchased for up to a maximum of $835,000.

"Although seemingly lukewarm in terms of real estate transactions, it is a more normalized spring market, moving at a more normal pace," said Sharun.

Despite the "staggered" month of March, home sales and prices are expected to increase overall through the rest of the spring and summer as inflation cools and there's the promise of lower mortgage interest rates.

"The gradual ramp-up in listings (for sale) should make for a busy summer season," said Sharun.

"The upward trajectory of inventory could be contributed to various factors, such as previously reluctant sellers being ready to take the plunge with interest rates no longer at its peak, vacation home dwellers looking to unload ahead of government policy changes, or simply due to seasonality. With the lack of inventory plaguing the real estate market for months, this will be a welcomed relief to buyer who are looking for more options."