Kelowna has once again returned to the leader board when it comes to real estate.
In the Re/Max 2015 Housing Market Outlook Report, which was released Wednesday, Kelowna outpaced much of the country by posting 23 per cent sales growth alongside an eight per cent uptick in pricing for 2014. And all signs point to 2015 being just as good, if not better, says Re/Max realtor Cliff Shillington.
As has been the case for several years, low prices and low interest rates have lured some new buyer into the market. Others have used pricing opportunities to trade up and Alberta’s strong economy has also had an impact.
But, the big change this year may just be chalked up to a more widespread positive mindset.
“It’s consumer optimism and confidence,” said Shillington. “If your buyers are not confident in their job security and what’s happening in the economy, they won’t get out there and buy.”
Shillington said that all around Kelowna, signs that the economy is on an uptick can be found.
“The car industry has had record sales,” he said. “And go out and have dinner. Restaurants are busy. There are more people who are spending money again.”
The abundance of optimism has sellers in a much better position than they were in the past.
Sales have increased, but the number of properties on the market have not—active listings are down 16 per cent over last year—and that has meant those looking to buy have had to get a competitive mindset.
“The under $500,000 mark is moving into a sellers market,” Shillington said. “If you have a good product in that price, there are a number of buyers for it. In several circumstances, we’re seeing several offers.”
If that trend continues as is, it’s expected the average residential sale price is expected to increase by seven per cent in 2015.
Of course, outside factors could temper the enthusiasm to buy.
One of the key indicators of local economic health is the Alberta’s economy, which is reliant on the tar sands.
The price of Alberta’s heavy crude dropped to its lowest price in five years, in an ongoing trend that started in June due to global oversupply.
Brent Crude, a major trading classification of sweet light crude oil that serves as a major benchmark price for purchases of oil worldwide, fell 3.9 per cent earlier this week to close at $64.24; it was at $115 in June.
That reversal of fortune raises questions about how the Alberta buyer will be affected.
“When we were doing the report the price of oil was stable, but in the last couple of weeks it has gone down quite a bit,” said Shillington. “That raises the question of whether this is a long-term price drop or short term. Most people say it’s short term and I think it is. If it is short term then our real estate activity will continue along as it is.”
AVERAGE RESIDENTIAL SALE PRICE