April 2021 Market Update

Imagine if the statistics in any given market are so off the charts that an experienced analyst says, “It must be a typo”. In March the absorption in the Central Okanagan was 99.76%. What that means is that in March virtually all houses that were on the market in the beginning of the month were sold by the end of the month. I have to remain professional and not use words that are too expressive but suffice it to say that is truly unbelievable. The average DOM (Days on Market to sell) in the Central Okanagan was 33 days. That is less than half of the 10 year average. The average sale price in March in the Central Okanagan was $160,000 higher than the average sale price of the last 12 months. That does not mean prices have gone up that much. I had one Realtor tell me that he believes that the market is rising $10,000 per month. The North Okanagan and the Shuswap are not as robust as the Kelowna area (Central Okanagan) but they are almost as surprising. The absorption for March in the North Okanagan was 84%. The Shuswap was 57%. Folks, there is no question, the paradise we live in, the Okanagan Shuswap is no longer a secret.

What does this all really mean to consumers and Realtors? People think we as Realtors must be having a heyday. In fact, I don’t think I have ever seen Realtors so frustrated. Almost all Realtors care deeply about their clients. They work hard to write offers that are legal and enforceable and with clauses to protect their clients, only to lose out to a higher bid over and over. Naturally, that is very frustrating for buyers and their Realtors. One way to get an advantage for a buyer is to write an offer with no conditions on it. When the seller signs the offer the house is sold which gives that particular buyer an advantage over one with conditions. The problem is there are risks involved. A good Realtor will explain those risks in detail but at the end of the day buyers are looking for any way to create an advantage for their offer. If you are a buyer in this crazy market be sure you understand the possible worst case scenarios if you make this type of offer. It does not mean that you should or should not make an offer like this. I personally have done it many times. It simply means you have to be informed, prepared and comfortable with the risks. Real Estate environments like this have been historically common in cities like Vancouver and Toronto but it is new here. People are moving here in droves and there is no indication that this is going to let up any time soon. Our job is not to tell buyers what to do. It is to make sure they understand all their options, all the risks involved in those options and then take instructions from our clients. As a buyer you must move fast in this market to get the house you want. Pay attention to your Realtor, listen to their advice, make an informed decision and then act and act fast if you want to get a step up on all the other numerous buyers that are likely looking at the same property.

Pricing a home is part science and part art. Market conditions affect home value, but pricing is also affected by marketing, first impressions on potential buyers, and negotiations. No single calculation can tell you what you get to take home at the end of the day.

Let’s sit down together and review your home’s value using a Comparative Market Analysis (CMA), and I can show you market influences as well as a plan to tackle the human elements of a future home sale. Let me know when we can meet to chat!