Kelowna's Buyer's Market Conditions

Buyer's market conditions have contributed to an upswing in home-buying activity in  Kelowna, with first-time purchasers taking advantage of pricing, selection and historically low interest rates.

Thirty per cent of year-to-date (February) sales (130 properties  out of 418) took place under $260,000, indicating that there are adequate options for buyers on tight budgets ----- condominiums among the most popular.  Nearly 80 condominiums have changed hands so far this year in Kelowna under the $260,000 price point.  However, very few options exist under the same threshold in the single-family category, with just 39 homes currently listed for sale ----- most of which can be described as handyman specials.  Those opting for condominiuns will find 151 one-bedroom units currently listed for sale, with an average asking price of $235,000, typically averaging 800 sq ft.. Apartment-style units can start as low as $200,000 in older areas of the city that are being revitalized.

While affordability is an issue for some, a growing number of first-time purchasers are spending amounts closer to the average price, typically between $350,000 and $400,000.  Popular are starter homes located in established communities, including Glen Rosa, Rutland and North Glenmore on the peripherals, as well as Central Kelowna.  Starter product can run the gamut from newer construction to older, renovated homes.  Buyers that can afford it are choosing to ante up to secure the best location possible for the dollar, while those on a strict budget will look to the peripherals ----- a reasonable trade-off, placing suburban homeowners just twenty minutes from Kelowna proper.

The greatest opportunity that exists at present for entry-level buyers are prices that remain off year-ago levels.  Housing values have been relatively flat over the past six months, but the gap is now closing and prices are expected to resume modest upward trajectory heading into the spring market.  Employment is also on the rise, now just slightly off the national average.  Continued improvement is expected, which will also bode well for real estate in the weeks and months ahead.  While a very small percentage of first-time homebuyers moved to get into the housing market ahead of the implementation were negligible overall.

*Represents Gross Debt Ratio of 32%, 3 yr closed fixed mortgage at 3.89% and a 30 yr amortization period based on Feb 2011 ytd average price.  Income required does not take into account property tax, heat or mortgage insurance.

**Average Price Source: Canadian Real Estate Association, Local Real Estate Boards