As we move through 2024, there are some trends in the Kelowna real estate market which we have touched on on a monthly basis now 8 months in here are my thoughts I have on the real estate market overall.

Thought #1

We have spent an ample amount of time and looked at the overall inventory and how it has increased this year compared to what we have come accustomed to in the last 10 years.  But there are signs that we may have hit the  peak of inventory at the end of July, with 3,423 active listings on the market.. This makes sense with seasonality and people looking to potentially take there home off the market with the approach of winter, we can expect inventory levels to continue decreasing, and we have already seen that happen, as of Monday, that number has dropped to 3,321, for home buyers this is likely the time you’ll have the most amount of properties to choose from in the foreseeable future, and for home sellers, the drop in listings is leading to potentially less competition depending on the type of properties.

Thought #2

Now that we have looked at the supply, lets look at the demand. In terms of population growth, Canada's population is now estimated at 41,012,563 as of Q2 2024, marking an increase of 1,272,930 since the same time last year.  Here in BC, with only we've seen a rise of 179,821 in population the province gained +40,271 through international migration, with +25,272 non-permanent residents and +17,760 new immigrants. These numbers continue to drive demand in the housing market, especially in areas experiencing this influx.

Interestingly, out of the 16,679 people who left BC in Q1, 9,218 moved to Alberta, likely attracted by its lower cost of living and robust economy. However, with increasing demand, Alberta's real estate prices are also on the rise, which might narrow the gap between Alberta and BC home prices over time.

Thought # 3

On the financial side, interest rates are coming down, with further cuts anticipated in the next three rate announcements. This presents a unique opportunity for buyers who can benefit from getting into the market with lower borrowing costs, potentially making the sting of a new rate not hurt so much.

The current market sentiment reflects a bit of a standstill, as many potential buyers are cautious about buying and not wanting to break their current mortgage rates. However, this could actually work in favor of those who are ready to buy now, as the reduced competition allows for more thorough due diligence and better negotiation power on the offer when negotiating.  

To quote Warren Buffett “A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful.”

Notably, the sub-$1M single-family home market remains strong with decent demand there is increased competition, with about five months of inventory, indicating sustained demand in this segment which likely will compound in the spring when we normally see an increase in buyers come into the market.

Thought #4

The real estate market is showings signs with the government fingerprints all over it.  Trying to create models and predict where the real estate market will land is becoming tougher and tougher. With a multitude of changes in BC we have seen tenancy rules, short term rentals, small scale multi unit housing and capital gains changes there has been no shortage of government related changes in both the provincial and federal corners. For better or worse there is some confusion in the marketplace, which it seems we are seeing signs of that confusion.  Or maybe the it is economy related, it is tough to say for sure.

Looking ahead, the combination of high immigration levels, strong demand in key market segments, and declining interest rates is likely to boost overall market activity, short term rentals and small scale multi unit housing appears to be increasing supply, but is it supply no one wants?….Time will tell. If you’re thinking about buying or selling, this could be a great time to explore your options.

If you have any questions or would like to discuss how these trends might impact your real estate goals, feel free to reach out. We are here to help!

Have a great week!