Dori Lionello, president of the South Okanagan Real Estate Board, said millenials are watching the real estate market but may be waiting to pull the trigger. Sales are comparable to last summer, with prices flattening out after the implementation of the Canadian Mortgage Stress Test. (Black Press file photo)

South Okanagan real estate market continues to stabilize, millennials eager to become homeowners

SOREB President Dori Lionello said millenials are carefully watching the market

Though the market is still recovering from the implementation of the Canadian Mortgage Stress Test, real estate in the South Okanagan is gradually shifting to a millennial buyer’s game.

Dori Lionello, local realtor and president of the South Okanagan Real Estate Board (SOREB), said that compared to last summer, real estate sales have increased but prices are still “flattening.”

“As we approached and entered into the summer months, things have gotten more active. The housing market in the South Okanagan is stabilizing after we noted a steep drop from the implementation of the stress test,” said Lionello. “Things are slowly climbing as we get into better weather and the demand is still strong. Sellers have had to flatten their prices because they’re not able to reach for increases that we were seeing year after year. But I wouldn’t say prices are dropping.”

Lionello said prior to the stress test being enacted in 2018, listings in the area in 2017 were at a record all-time low, and the demand drove prices up. She said that the changes in mortgage rules have balanced the market out, so sellers have to be realistic with their price point.

READ MORE: B.C. estimates $7 billion laundered in 2018, $5 billion in real estate

“I often reference with clients what’s called a perceived equity. So someone will see their neighbour’s house sell for $650,000 and they think they should get $655,000 because theirs is better. And everyone has an emotional attachment to their house so they’re just trying for a bit more,” said Lionello. “But we’re seeing this buyer resistance because they simply can’t pay more.”

As more seniors in the area get ready to list their homes and properties, Lionello said millenials are eager to enter the market and become homeowners, but cautious of what they can afford and whether a newer or older home is the right fit.

“There’s a lot of pent up demand, and a lot of millenials entering their homebuyer years and they’re watching the market correct. But the government has made it 20 per cent more expensive for them,” said Lionello. “We’re seeing a lot of younger families being stalled by the $650,000 price point, and when you’re buying in the Okanagan where there’s a large retirement population, a lot of the homes are outdated.

“A lot of buyers want everything to be shiny and new, and there’s a lot of new housing coming online and pushing that market and there’s certain incentives for new home purchases,” said Lionello. “For example if you purchase under $750,000 you’re exempt from property transfer tax. And then you look at these single family homes built in the 80s and they’re expecting $650,000. So it’s an interesting market when your affordable homes are fairly dated and you have millenials wanting everything to be brand new and have immediate gratification, to move right in and nothing go wrong for 10 years. That’s versus moving into something at a similar price point but needs $100,000 worth of updating.”

READ MORE: B.C. real estate board blames stress test for dampening home sales in February

Millenials may also be holding off on putting down their five per cent on a home purchase since prices have slightly dropped in the area from last year. She said this again is related to the market flattening out, and does not mean that sellers are taking a dive, but that millenials may be more hesitant to pull the trigger in case the numbers slip a bit more.

“I don’t think it’s possible for us to slip too much more though, because we have such a low vacancy rate that a lot of homeowners are saying ‘Forget it, I’m not going to let my house go for $50,000 less.’ They’ll opt to put a renter in there instead,” said Lionello. “So what we’re finding is that renters are almost paying more than what the homeowner is paying for their mortgage. So the rent is so high in this town, it doesn’t make sense to put more pressure on home prices because they can just rent them out.”

Lionello said no one can predict what will happen in the future in terms of real estate, but she anticipates a very busy fall when families return home from summer vacation. She said typically October is her busiest month and she believes it will remain steady as years prior.

To report a typo, email: editor@pentictonwesternnews.com.

Jordyn Thomson | Reporter
JordynThomson 
Send Jordyn Thomson an email.
Like the Western News on Facebook.
Follow us on Twitter.

Just Posted

RDOS cannabis production bylaw goes to public hearing

Hearing on micro cannabis production facilities will be held Nov. 21

Growing cherries, apples, pears — and big pumpkins

Boerboom worked to produce a massive melon from his Summerland farm

Drivers warn of slippery conditions on the Coquihalla

Snow is falling at the Summit of the Coquihalla

RDOS issues 405 building permits in first nine months of 2019

Construction activity higher this year than during same period last year

Flaming pumpkins set to fly in Summerland

The annual Flamin’ Pumpkin Chunkin’ takes place at Saxon Estate Winery

A day to celebrate your newspaper carrier

Canadian Carrier Appreciation Day is Oct. 12

Zantac, the over-the-counter heartburn drug, pulled in Canada, U.S.

Health Canada also investigates possible carcinogen in some ranitidine drugs

Shooters compete in Summerland

Seven youth participants take aim

B.C. public safety minister says cannabis edibles not in stores til January

Mike Farnworth says he wants regional issues considered when it comes to licensing

Greta Thunberg calls for climate action in Alberta, but doesn’t talk oilsands

Swedish teen was met with some oil and gas industry supporters who came in a truck convoy

Scheer denies spreading ‘misinformation’ in predicting unannounced Liberal taxes

Conservative leader had claimed that a potential NDP-Liberal coalition could lead to a hike in GST

Council asks to limit cruise ship visits to Victoria harbour

Mayor says motion is not meant to curtail current visits or limit local cruise industry expansion

Grab your Lederhosen, Penticton Oktoberfest is tomorrow!

The 10th annual event is hosted at the Penticton Lakeside Resort and kicks off Penticton Beer Week

Chilliwack man pleads guilty in crash that killed pregnant woman

Frank Tessman charged under Motor Vehicle Act for accident that killed Kelowna school teacher

Most Read