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

A laboratory technician holds a dose of a COVID-19 novel coronavirus vaccine candidate that’s ready for trial on monkeys at the National Primate Research Center of Thailand. (Mladen Antonov - AFP)
Interior Health reports 66 new COVID-19 infections

570 cases are active; 18 in hospital

The Golden Nordic Club is working towards a COVID-safe winter ski season opening. (File photo)
Golden Nordic Ski Club working towards opening

While Dawn Mountain is provincially run and open, the chalet and Nordic Club are not as of yet

The Interact Club meets in 2019 for their annual Anti-Grinch project. This year, the club members will add the Angel Tree to their list of Christmas charitable causes. (Contributed)
Interact Club takes on Angel Tree

With changes to this year’s Anti-Grinch project, there is increased capacity for the Angel Tree

santa.
Morning Start: Santa Claus has an official pilot’s license

Your morning start for Wednesday, Dec. 2, 2020

A woman wearing a face mask to curb the spread of COVID-19 uses walking sticks while walking up a hill, in New Westminster, B.C., on Sunday, November 29, 2020. THE CANADIAN PRESS/Darryl Dyck
Interior Health reports 83 more COVID-19 infections overnight

46 cases are now associated with a COVID-19 community cluster in Revelstoke

(Google Maps)
Osoyoos Credit Union staff member tests positive for COVID-19

The credit union made the announcement Dec. 1

An Enderby restaurant and pub was shut down Sunday afternoon, Nov. 29, 2020 as a precaution after a guest reportedly tested positive for COVID-19. (Howard Johnson photo)
North Okanagan pub reopens after COVID-19 scare

After a guest reportedly tested positive for the virus, staff test results came back negative

Alix Longland
Trauma resources ready for North Okanagan refugees

Family Resource Centre working with UBCO social work grad to reach out to local refugees

Elkhart Gas Station, located on Highway 97C about 60 kilometres west of Peachland, opened in November 2020. (Google maps)
The Okanagan Connector now has a gas station

The highway previously ran for over 117 kilometres without a place to fuel up

The Hughes’ Grinch was stolen from their front yard Wednesday, Dec. 1, 2020. The Santa suit the Grinch is wearing is 50 years old and has sentimental value. It was once worn by April Hughes’ dad. (Hughes photo)
Grinch stolen from Penticton home is ‘irreplaceable’

The Hughes have had a Christmas display for 25 years on Grandy Avenue in Penticton

Midway RCMP’s Cpl. Phil Peters spoke at Greenwood’s city council meeting Monday, Nov. 23. Photo: Laurie Tritschler
B.C. Mountie builds fire to warm suspect with hypothermia prior to rescue

Cpl. Phil Peters said the civilian helped police track, apprehend and eventually rescue the suspect

Premier John Horgan leaves the podium following his first press conference of the year as he comments on various questions from the media in the Press Gallery at B.C. Legislature in Victoria, B.C., on Monday, January 13, 2020. THE CANADIAN PRESS/Chad Hipolito
Revelstoke COVID-19 cluster linked to non-essential travel: Horgan

There have been 46 cases of COVID-19 in the community

Students at Lavington Elementary crammed a car full of non-perishables for those in the community facing food insecurity. Spearheaded by teacher January Peebles (left), the donations were picked up by Give LUCK founder Myrika Godard, who works to connect donors with donees in the North Okanagan. (Give LUCK photo)

Most Read