In general, it has been a very frustrating market for home sellers.  Here are some of the big reasons why:

1.  Over Supply: Based on OMREB’s September update, there are 5,045 listings in the Central Okanagan.  In some product categories (condo’s, high end homes), there is a huge glut of inventory available. That’s alot of choice, further complicated by…

2. Low Demand:   This September saw a 45% decline in sales over the same month last year, 22% lower than August.  There just aren’t enough buyers out there turn over the high level of inventory available.  The market is still very unbalanced.  Some of the reasons tied to this include;

3. HST Misconceptions:  It’s been over 3 months since the adoption of HST in BC and still everyday I hear someone commenting on how they are not buying because of the added burden of HST.  HST is only applicable on NEW HOMES.  HST is NOT an automatic 12% on the purchase price of a new home.  New homes under the $525K threshold should net out the same in tax paid as before the HST was implemented. Check out our previous HST blog for more info.  I am not saying it isn’t confusing, but engaging a Realtor early on can help.

4. Lack of Urgency:  Those buyers that don’t have a home to sell are certainly in the driver’s seat and they know it.  They are taking their time, many viewing up to 30 plus homes before making a decision.  The buying cycle is MUCH longer than it was back in the hey-days of 2006 or 2007.

5.  Where have all the Albertans gone? Well, they aren’t buying here… at least not at the rate they were in the past several years.  The real estate market in Calgary and Edmonton is abysmal so Albertans can’t sell their homes, can’t afford to buy Kelowna real estate (based on the devaluation of their Alberta home) or are not willing to take on the added risk of buying a second home here.

6. Complications: Even those people that want to buy up or down or in a new neighborhood, are hamstrung by a subject to the sale of their own home.

7.  Price: As a result of the frenzied real estate market a few years back, many sellers purchased their home for a higher price than the market will accept right now.  Bottom line, housing prices are still generally too high and there is a definite disconnect between real (or perceived) value to the seller and a home’s actual market value.  Homes sell at market value.

The bottom line though is that there are many reasons why you’re home may not be selling right now- as this list outlines pretty clearly, price is just one factor.

The market will come back, it always does…

Darcy
Kelowna Real Estate Pros