Record-high house prices in Penticton

Penticton house prices have been on a tear for the past two years.

In April, the city set yet another record-high for the benchmark selling price of a typical single-family home.

The price, released this week by the Association of Interior Realtors, puts the benchmark at a new peak of $771,600 up from $731,100 in March and up an astounding 27% from last year.

For townhouses, the new record-high benchmark is $525,000, up 27% over last year.

And the benchmark for a typical condominium is also at a new record of $409,800, up 26% from last year.

Even though there was a pandemic, Penticton was an ultra-hot housing market as people reassessed their lives and decided to buy a bigger and better place if they were going to be spending more time at home with family.

There was also a surge of buyers from Vancouver and Toronto who sold their homes for a pretty penny and relocated to Penticton to buy a comparable or better house for less.

The thinking of many of those purchasers from Vancouver and Toronto was they might as well be in a smaller, beautiful city like Penticton if they were going to be working remotely from home.

The competition for homes often meant multiple offers, no conditions on sales and homes going for more than the asking price.

While prices are on the rise, the number of sales is down because there's a shortage of homes for sale and some people have been priced out of the market.

In April, sales of all types of homes -- single-family, townhouse and condo -- totalled 201, a 33% drop from April 2021.

"It is important to remember that this is not the same market we had a year ago," said association president Lyndi Cruickshank.

"For almost the entire year in 2021 we had record-high sales each month, so to say sales are down does not mean they are low, they are just lower in comparison to a time of unusual real estate market activity."

High prices and higher mortgage interest rates could trigger a further slowdown in sales and maybe even a stalling or dip in prices.

"The current interest rate environment will naturally slow things down bringing real estate activity back to a healthier market," said Cruickshank, who is also the broker-owner at Engel & Volkers South Okanagan.

"We're already starting to see the transition reflected in the number of sales (down) and the way transactions are transpiring (fewer multiple bids for homes and fewer homes going for over asking price)."