The Okanagan single-family home market appears to be feeling the impact of higher interest rates.
The Association of Interior Realtors released data for January, showing that benchmark home prices were down in January throughout the region.
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Prices dropped between five and nearly eight per cent compared to January 2022.
“Last year when a client could afford a purchase of let’s say $380,000, at an income of $80,000 for their year, this year it is only about $340,000 so it is a big difference,” said Deb White, owner of White House Mortgages in Vernon.
Benchmark prices for single-family homes compared to January 2022.
While the detached home prices are down, they haven’t plummeted and aren’t expected to.
“In the Okanagan we are probably not going to see a massive plummeting of home prices because we are one of the most desirable areas to live in climate-wise in Canada and demographically there is a large section of the population that is ready for retirement and will probably look to the Okanagan,” said real estate agent Maria Besso.
White paints a similar picture, saying the Okanagan real estate market is continuing with people just finding more creative ways to buy a home in the higher interest rate climate.
“Whether they sell a vehicle for their down payment, or they are borrowing money from their family, they are finding it more affordable to buy a home rather than rent,” said White.
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Meanwhile, trends in condos and apartments are mixed depending on where in the region you look.
In January, benchmark prices dropped four per cent in the Central Okanagan while rising almost six percent in the North Okanagan.
January 2023 benchmark prices for condos and apartments in the Okanagan compared to prices in January 2022.
In the North Okanagan specifically, with interest rates up, there appears to be a clear trend of buyers opting for smaller more affordable properties. Detached home prices were down in January while condo and townhouse prices rose.
“What we are seeing is seven percent stress tests and so there is a finite amount of money that people can qualify for and so there is more demand in the lower part of the price ranges,” said Besso.
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“Also there is competition because the retirees are also coming here, maybe wanting to downsize, and also looking under $800,000. So they are competing for the same houses perhaps as the younger generation.”
January 2023 benchmark prices compared to January 2022.
A variety of trends to watch out for as the Okanagan heads into the traditionally hotter spring real estate market.