As of late 2024, the Kelowna and Okanagan market is firmly in a buyer’s market phase. Over the past two years, high interest rates have slowed the market as borrowing costs have increased, cooling buyer enthusiasm and leading to a buildup in available inventory. The interest rate hikes from 2022 through 2023 raised the cost of mortgages, causing a deceleration in purchasing activity across much of British Columbia. If you are thinking of buying or selling, contact one of our Kelowna Real Estate Agents.
Key Market Stats
- Inventory Levels: As of September 2024, there has been a 27.1% year-over-year increase in active listings, with 9,972 properties on the market. This supply abundance is an essential marker of a buyer’s market, providing buyers with more choices and stronger negotiation power.
- Sales Volume: Residential unit sales saw a modest 0.3% increase, with 1,025 homes sold in September 2024. Despite slight gains in sales, the higher inventory continues to offer favorable conditions for buyers.
- Prices: Prices remain variable across property types and regions. For instance, single-family homes in the Central Okanagan have seen price increases, while some other areas, such as the South Okanagan, have experienced a slight decline in average prices.
What to Expect in 2025: A Potential Market Shift
The current high-interest environment is gradually changing, with rates expected to ease over the coming months. As interest rates begin to decrease, it’s likely that market activity will increase. Lower borrowing costs may renew buyer enthusiasm and stimulate a stronger demand for properties, potentially leading to a more balanced market by the spring and summer of 2025.
What This Means for Buyers
- Increased Purchasing Power: With interest rates projected to decline, buyers could qualify for larger loans, enabling them to consider properties they might have previously dismissed as unaffordable.
- More Competition on the Horizon: As rates drop, more buyers may enter the market, intensifying competition. Acting sooner rather than later could secure the advantages of today’s buyer’s market before conditions start to balance out.
What This Means for Sellers
- Preparing for Increased Demand: While sellers currently face a competitive market, the anticipated shift in spring and summer 2025 may bring more opportunities to achieve their asking prices.
- Market Positioning: Sellers may benefit from focusing on property presentation and strategic pricing to attract buyers now while also preparing for improved selling conditions as the market moves toward balance.
Practical Tips for Navigating the Current Market in Kelowna and the Okanagan
For Buyers
- Explore Options: In today’s buyer’s market, there is a broad range of properties available. Take the time to explore your options and compare properties carefully.
- Negotiate: With the upper hand, you may be able to negotiate favorable terms such as closing costs, minor repairs, or even a lower price.
- Lock in Rates Now: While rates are still relatively high, lenders may offer you the ability to lock in a rate now and potentially refinance at a lower rate in the future, securing today’s lower prices with more favorable future terms.
For Sellers
- Invest in Presentation: As buyers have more choices, making your property stand out is essential. Professional staging, high-quality photography, and a well-maintained exterior can go a long way.
- Consider Pricing Strategically: Setting a realistic price can help attract motivated buyers who recognize a well-priced opportunity.
- Work with a Local Real Estate Professional: Having a realtor who understands Kelowna and Okanagan market conditions can help you navigate buyer expectations and secure a timely sale.
Final Thoughts: Staying Ahead of Market Trends
Understanding current market conditions and anticipating future shifts can make a world of difference when buying or selling property. In the Kelowna and Okanagan region, real estate trends are closely tied to interest rates, inventory levels, and demand. While today’s market favors buyers, a potential easing of interest rates in 2025 could bring about a more balanced market. Whether you’re buying or selling, staying informed and working with an experienced real estate professional can help you navigate this evolving landscape with confidence.
References
Canadian Real Estate Association. (2024). Okanagan Mainline Real Estate Board statistics. CREA Statistics. Retrieved from https://creastats.crea.ca/board/okan/
Okanagan Mainline Real Estate Board. (2024). Market Intelligence Report: September 2024. Okanagan Mainline Real Estate Board (OMREB).
