08/14/2024
This month's theme is, "Trust the Stats". So often sellers say that my neighbours got this much so the market must be increasing or decreasing. Realtors say my sales are up or down from last year so the market must be increasing or decreasing. However, the way we decide our opinion on anything that changes constantly is by comparing or contrasting it to the same type of data immediately prior to this point in time. When the summer heat switches from 40 to 35 degrees we say. "It's finally cooling off".
Based on the average absorption from January to July in the last 16 years in the Central Okanagan the absorption rate in the last 16 years was lower than 2024's absorption 31% of the time. This means that the number of sales compared to the total residential inventory is down, but it has been lower 31% of the time in the last 16 years. This is actually the same story right across the province by BCREA's account, (British Columbia Real Estate Association).
Something that has changed dramatically in the last year is the difference between list price and sale price. The number of buyers per listing in each price category is down dramatically. A couple years ago the average sale price was above the average list price. Today the average sale price is 3.5% below the average list price in the interior. That means that the only houses selling are the ones where the seller is most aggressive on price. Buyers have second and third choices now, they did not a couple years ago.
Lastly, the interest rates continue to inch down. Each 1/4% drop (25 Basis Points) puts another sliver of buyers back into the market or allows another sliver of the market to buy something a little more expensive. You will likely continue to see a market that is in the low range of balanced for the rest of 2024. However, you always have to remember that is just the world according to Bill.
