Single Family Homes

2010 started off a lot more quickly than 2009 with about 150 sales in the first quarter compared to only 108 sales in 2009. The only other bright spot during the year came in the second quarter where sales were around 225 and averaged 12% of listings during that period. Wow, a somewhat BALANCED market during that brief time! The rest of the year sales lagged far behind listings. Sales languished in the 6% range compared to listings over the rest of the year which was firmly in a BUYERS market (see chart at left). The number of homes on the market peaked in June at 875 which are levels we haven’t seen since 1993. Let’s hope we don’t see a repeat of that in 2011, otherwise it could be a long hot summer again for Sellers!

Strangley enough housing prices did not react to the traditional downward pressure of low sales compared to listings and actually finished the year marginally higher than in 2009. I can’t explain that one. The average sold price of a single family home in the North Okanagan is now $384,271 (see chart at right).

Strata Homes (Townhouses and Condominiums)

Strata homes had a similar year in 2010 compared to 2009 with lackluster sales and marginal price increases overall. In fact, it could be argued that 2008 through 2010 were the same with about 350 sales per year and prices averaging around the $259,000 range. The average price of a strata unit in the North Okanagan is now $260,746 or almost the same as prices were in 2008 (see graph).

Even though the numbers show that prices have remained similar over the last three years, I have seen properties that will actually now yield a POSITIVE CASH FLOW for investors (Positive Cash Flow is King). This is even true of a very few single family homes.  A wise investor can pick up a 3 bed, 1 ½ bath townhouse for about $126,000 and rent it out for about $900 per month. With not much money down you can start taking home some cash every month and spend it on FUN STUFF, or pay off the mortgage more quickly, of course.

Conclusion

Well, what do I think will happen in the Real Estate market in 2011? Let me get my crystal ball out and check!

I expect that sales this year will be up a bit (5 – 10%) over last year. I expect to see similar listing counts and trends as last year. That is, we should climb from 525 single family listings now and peak around 850 listings in June. Listings will then decline over the rest of the year and finish around 500 again next December.

The real question is what will happen to home prices in 2011? Based on my predictions for listings and with more sales predicted every month we could see us move to a more balanced market. This means that prices will probably stay close to the same as last year and may even nudge up a percent or two higher. This will be a good thing for both Buyers and Sellers. Buyers will still have lots of homes to look at and Sellers won’t have to drop their prices as much to make a sale.

The only fly in the ointment is the Federal governments play to protect consumers from increasing their debt load. We saw signs of that recently with new federal regulations that will limit the amortization period to 30 years from 35 years and will reduce equity take out from 90% to 85%. These restrictions will not only limit first time home owners, but will also hinder potential investors who want to increase their Real Estate holdings. For investors or first time home buyers my advice is to get cracking and have a firm and binding offer before March 10, 2011. The new rules won’t come into effect until March 18, 2011.

One thing still remains constant, however. That is, the North Okanagan is one of the best places on the planet to live. We have a four season paradise that retiree’s just love to come to. There will be more people retiring over the next 10 years than have ever retired and they just might decide to move here!

It is an awesome time right now to get into Real Estate ownership, particularly if you are a first time home buyer. The window is closing soon, though, so call Greg now to discuss how you can take advantage of this market.

WANT A FREE HOME MARKET EVALUATION? CALL GREG AT 250-503-3758 TO GET YOURS!