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

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Chelsea Ishizuka was borned and raised in Penticton but has now moved to Japan. When she found out there was a popular restaurant there named after Penticton, she had to go check it out. Here she is with the owner (right). (Facebook)
Popular restaurant in Japan named after city of Penticton

A Pentictonite now living in Tokyo discovered the eatery and the history behind its name

There is no true picture of how many youth in Penticton are experiencing housing instability or true homelessness. The Foundry and the city of Penticton are trying to find that out.
How many youth are experiencing homelessness in Penticton?

Foundry Penticton and the City have partnered on a youth survey open until March 13

(File photo)
COLUMN: How to help your young reluctant reader

Library has resources to help children

(Pacific Coastal Airlines photo)
Potential COVID-19 exposure on March 1 Penticton flight

Interior Health lists a public exposure for the Pacific Air Flight from Vancouver on March 1

The Town of Osoyoos is looking into allowing two food trucks at the downtown plaza over the summer, which would require updates to several town policies and bylaws. (Kevin Clark - Black Press Media File)
Osoyoos council to weigh allowing additional downtown food trucks

The proposal would be aimed to benefits the summer’s downtown plaza

The James C Richardson Pipe Band marches in a Remembrance Day parade on Nov. 11, 2019 in Chilliwack. Wednesday, March 10 is International Bagpipe Day. (Jenna Hauck/ Chilliwack Progress file)
Unofficial holidays: Here’s what people are celebrating for the week of March 7 to 13

International Bagpipe Day, Wash Your Nose Day and Kidney Day are all coming up this week

Coldstream’s Kalamalka Secondary has teamed up with Globox on a fundraising raffle for its graduating class of 2021. (Photo supplied)
Okanagan secondary school grads glowing over fundraiser

Kalamalka Secondary teams with company on fundraising raffle, replacing annual apple pie fundraiser

(The Canadian Press)
‘Worse than Sept. 11, SARS and financial crisis combined’: Tourism industry in crisis

Travel services saw the biggest drop in active businesses with 31 per cent fewer firms operating

Pictures and notes in from friends and classmates make up a memorial in support and memory of Aubrey Berry, 4, and her sister Chloe, 6, during a vigil held at Willows Beach in Oak Bay, B.C., on December 30, 2017. THE CANADIAN PRESS/Chad Hipolito
Mother of slain daughters supports recent changes to Canada’s Divorce Act

Sarah Cotton-Elliott said she believed her children took a back seat to arranging equal parenting

Multiple people were injured at a Vernon home following an early-morning break-in Saturday, March 6, 2021. (Black Press file photo)
Multiple people left injured following break-and-enter in Vernon

Police believe the early-morning break-in was targeted and not a threat to the general public

Isaac Gilbert is running for council in the by-election for Jake Kimberley’s vacated seat. (Submitted)
First candidate for Penticton council by-election makes himself known

Isaac Gilbert is making a second run at council after receiving 19.63 per cent of the vote in 2018

Kelowna General Hospital (File photo)
Second COVID-19 outbreak declared at Kelowna General Hospital

One patient and one staff member on Unit have tested positive for the virus.

Victoria man Brett Andersen is asking for people’s help to secure him one of eight free tickets to the moon. (Screenshot/@brettandersen Instagram)
Victoria man wants your help securing a free ticket to the moon

Japanese billionaire offering eight people a trip to the moon

Most Read