A note to all future buyers, investors and clients
The Kelowna Market
By Brock Thorvaldson
Over the past few quarters of 2008 we have seen quite a change in the dynamics of the real estate market in and around the Kelowna area. In the preceding 4 years house prices in the valley had doubled and we became one of the most expensive places to live in the country. In reality we should be at the upper range for house prices, based on what Kelowna has to offer. It is arguable that Kelowna and Victoria should be in that upper bracket based on their aesthetic value and population statistics. Kelowna is one of the fastest growing cities in Canada. The population is forecasted to double from it's current population of just over 100,000 by 2020, giving us a lot hope for the future of our city.
When looking at this years statistics we do have to keep in mind that 2007 was a record year. The boom had to slow down at some point in order to keep Kelowna prices from escalating out of control. As we look ahead we have to consider the following key points in today’s economy:
As you know, there are major financial problems in the United States that affects us greatly. This is due to the fact that many U.S investors are either not in a position to look, or they are looking locally for deals given the foreclosure situation. The influence for local Canadian purchasers to buy and invest in real estate in the U.S. has now become a common trend. The uncertainty in the housing and stock markets in the U.S has made an impact on the Canadian purchaser. The Alberta markets have slowed lately which lowers the investment dollars comming in from our neighbors to the East. The slow here has more to do with situations elewhere than with what is happening here. This situation will inevitably turn around and will not be a major issue given the population growth the Okanagan is able to sustain and all the other attractions that we enjoy here.
The 2010 Olympic games will bring much visibility to our beautiful city and likely entice investors from the world over. Over the next decade Kelowna is going to grow a great deal. Even over the past 10 years we have seen dramatic changes throughout our city, with growing developments as well as business’s and even the new bridge. Feel free to visit www.kelowna.ca and click on projects to view various plans to dramatically alter the downtown core with marinas, walkways and giant fountains. Kelowna is starting to dress up for the occasion and we can expect that home prices will certainly go up again in the near future.
Right now we are seeing many homes that are not selling and agents are either encouraging people to lower their prices or the listings are expiring on the market due to overpricing. It is becoming more and more of a buyers market as people are sacrificing their prices in order to get their home sold over the inflated competition. I believe as the fall approaches and into the winter we will see prices at very healthy levels for the average buyer. In Spring the prices will be similar to what they are now, as I expect we won’t see much increase from now till then. Prices always go up a little bit in the spring so now may be the right time to buy. In the future prices will rise again to reflect the popularity of the area and the ever increasing population growth.
At this time, you can find homes for 300K (base price in the market) which was a rarity a year ago. I am encouraging any buyers who have been watching and waiting that now is a great time to start to get serious about taking advantage of this current situation. From an investors standpoint there are very good income returns in the market because people who are forced to sell due to situations such as job transfers etc. are pricing their homes at very fair levels. People looking for investments would be wise to purchase now at this low period as the future looks positive for growth in the market over the next 5 years.
Although some homes are selling for low prices it is now essential that you evaluate all aspects of the home to ensure that the value is really there. Homes with good curb appeal, large lot sizes and new features are always in demand. In this market you may be able to pick up something for a bargain, but if it doesn’t have any curb appeal or a nice layout then it’s going to be hard to sell down the line without a lot of time, work and money.
Every purchaser is looking for something that will work for them and have the potential to become a strong investment down the line. It isn’t always a smart decision to buy something because it is advertised as ‘recently reduced by 20K’, although these listings are obviously ones to evaluate and consider very carefully. When you decide to move forward in making a purchase in today’s market, I will focus in and evaluate every option for you in detail. I will strive to make sure we find something that fits your needs, pocketbook and lifestyle.
Thanks for taking the time to read my email and please contact me with any feedback and/or questions. I would be happy to receive any information on where you are with your plans as well as any timeframes you may have in respect to your future real estate investment.