Okanagan Real Estate | Housing Market Forecast
35 years ago I rode my bike across the Rocky Mountains and down into the Okanagan Valley where it was 112 F or 42 C. It was 90 miles of scorching heat but it was the best experience, I loved the character of the region. An experience I won’t forget.
I could see right away how beautiful the Okanagan was. Back then, it was known for its fruit farms and long summer climate, and I happily gorged on peaches, nectarines and drank 16 bottles of water at the hotel. Its California like feel has attracted a lot of tourists and new residents since and its housing market, wineries, and tourism industry have flourished.
Recent stats from OMREB show lagging sales last month but with prices rising strongly, ahead of business reopening and job losses.
OMREB President Kim Heizmann, said “we are starting to see a return to real estate activity which looks promising for the future, however we remain cautious about predicting future outcomes as many economic factors will have impacts.”
My prediction for home prices in Kelowna, Vernon, and Penticton? A more solid rise during June. You can confirm that with your Okanagan Realtor who may have some June stats already. We know from other markets, that listings are not keeping up. Homeowners are afraid to sell, yet buyers are as eager as ever. With the move to rural locations away from urban condos and apartments, and reopening of the Calgary, Vancouver and Okanagan economies, a sizable flock of buyers are bidding up home prices.
For almost 7 years now, eager buyers from Vancouver and Calgary have been looking for houses for sale in the Okanagan. With that influx of money for resale homes and new construction, the region has become a paradise for home buyers. See the latest Okanagan housing price stats below.
The Corona Virus epidemic has hit the Okanagan cities as hard as any North American housing market, but signs of recovery are already apparent. And the beautiful Okanagan is a desirable location for a number of recognizable groups of buyers in 2020 and the housing market outlook here is positive.
Which Okanagan City is Most Desirable?
Vernon, Kelowna, Penticton, Summerland, and Osoyoos are the Okanagan cities of most interest to buyers. They’re all on the edge of one of Canada’s most beautiful settings — Okanagan Lake.
The full range of communities you might consider buying a home in include Armstrong, Coldstream, Enderby, Lumby, Spallumcheen, Vernon, Lake Country, Kelowna, West Kelowna, Peachland, Summerland, Penticton, Oliver and Osoyoos. Each has its own character, views, amenities, and price point.
For home buyers, the slowing of sales in the last 3 years has eased the challenge of competing for a home here. Yet, as the Okanagan housing market report’s stats shown below, listings are meager and new home construction has been subdued.
It’s unlikely that home and property listings will keep pace with demand over the next 6 months and into 2021.
What Drives Home Sales in the Okanagan?
A number of factors are still driving the purchase of homes here. Employment and the economy in Thompson/Okanagan have been strong. In 2019, almost 18,000 jobs were created. Although the Corona Virus shutdown has subdued recent sales, the migration to the Okanagan Valley of BC will resume.
Home prices in May in the Okanagan cities rose slightly although home sales plummeted 46%.
But this region of British Columbia is so inviting, economically viable, and rewarding to live in, there’s not much to stop a rising tide of new buyers. The housing market prediction for the Okanagan is thumbs up.
|Okanagan Home Prices in May|
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Okanagan Mainline Real Estate Report May 2020 (update June 18)
Moving Into June, July and August of 2020. As the shutdown ends, homebuyers across North America are back out hunting for an ideal house. Some Realtors have predicted price wars and there’s nothing to say that sales will rocket and price will climb. Expect inventory to fall dramatically.
Kelowna Home Price Forecast
Remax in its February forecast report believed prices and sales would flatten in 2020. They reported an 8% decrease in sales in 2019.
They believe population growth in Kelowna will grow about 50,000 more people by 2040. That’s a trend that will push home prices consistently higher. Kelowna North is expected to be the hottest neighbourhood.
Kelowna Realtors, The Stone Sisters (stonesisters.com) have reported increasing inventory of homes for sale, sales well down, while prices have risen 5%. If this continues through the summer, the numbers should be more dramatic. Sellers are likely waiting for a peak, and even with a fall slowdown, they should get their price this year.
They report sagging sales of condominiums, down 56% and prices down 10%. This might be due to the Covid 19 disease threat in high density buildings, higher mortgage requirement rules affecting first time buyers and a virtual stop to the Okanagan’s tourism industry.
Bad weather might be playing into demand of late.
To give you a good view of the Okanagan lifestyle, here are the Stone Sisters (Kelowna Realtors) introducing a beautiful lakeside property in the prestigious, lakefront boutique community called Mission Bay.
Rent Prices in the Okanagan
Market conditions for apartment and home renters in the Okanagan is good. It is rated as an affordable area for renters. the average rent paid across Canada is about $1800 per month. In Kelowna however, rent prices are steep averaging $1,800 for a 2 bedroom and $2,975 for a 3 bedroom house.
Rents drop considerably as you go north. Central Okanagan rents average $1184 while in Vernon and North Okanagan up into Shuswap and Revelstoke, rents drop to about $950 a month. Certainly, for any renter in Toronto or Vancouver, the cost of living here is excellent. With condo buying hurting for the foreseeable future, some of the available units might be rented out.
Sellers can’t wait for the Corona Virus to disappear. The Corona virus vaccine distributed throughout the Okanagan is likely a long way away.
Who is Buying Homes in the Okanagan?
Previously, most buyers were oil patch workers from Calgary and Edmonton who tired of the cold Alberta winters. The dry, warm and sunny climate here reminds visitors of California. And with its booming wine industry, comparisons become even closer.
Most Realtors don’t just sell homes, they sell a lifestyle that many Canadians crave. And buyers come across Canada. A huge potential market exists in Ontario, Saskatchewan, Manitoba and Quebec. The dream of living in the US is taking a right turn all the way to eastern British Columbia.
Retiring baby boomers and a new group of digital nomads and remote workers are looking for more affordable living. The baby boomer generation between 59 and 70 is huge and they’re retiring right now too. They can’t wait to get out of Toronto, Montreal, Calgary and Vancouver.
Housing Supply and Demand in the Okanagan Valley
With the Alberta oil patch improving in the last 6 months of the year, more buyers from Calgary, Red Deer, Lethbridge and Edmonton will be searching online for homes for sale.
As many Canadian buyers weigh on their Canadian locations to live which includes Victoria, Niagara Region of Ontario, Thompson region of BC, Nova Scotia, and Muskoka and Collingwood in Ontario, they’ll find the Okanagan scores higher in everything.
From mountain biking, to golf, sailing and beach going in extended summers, to skiing and snowboarding in the winter, or enjoying using the deck for 8 months of the year, the benefits are overwhelmingly in favor of buying a home in one of the Okanagan’s many beautiful communities including Kelowna, Penticton, Summerland, Peachland, Vernon, Coldstream, and Osoyoos.
Why Live in the Okanagan?
The climate, lifestyle, culture and recreation opportunities on the hills and lakes of the Okanagan are the draw. Houses perched on hills overlooking the stunning color of Lake Okanagan draws the affluent crowd too. The region’s growth in luxury housing is notable.
The forecast for the region is very positive. As we see more decentralization of businesses in Vancouver, Calgary, Edmonton and Toronto, more Canadians will choose this area to live in. And they won’t have to give up much. We may even see companies themselves move to these regions. The rush to Northern California’s silicon valley was due to the incredible climate there. There’s nothing to stop a migration away from congested urban centers to cities such as Kelowna. Workers want to make the move.
For those people who need transportation to other cities, the Penticton and Kelowna airports offer routes to most cities that Okanagan professionals need to get to in a hurry. Many commute to Edmonton, Calgary, and Vancouver.
A serious impediment to home sales in the Okanagan Valley is the BC government’s speculation and vacancy tax of 12.5%.
Realists and pessimists might agree that construction will be slow due to government interference (NIMBYs), mortgage qualification rules, and lack of investment in home building. Home builders are optimistic right now, given the lack of resale homes and due to the new migration out of urban areas.
Short term or long term, you have to give the thumbs up to the whole Okanagan region for growth in home prices and migration trends. The area is attractive for a growing number of reasons. Now might be the right time to look for houses for sale in Vernon, Penticton and Kelowna BC.