Okanagan, Kelowna residential forecast: 2011 and 2012

MLS residential sales through the Okanagan Mainline Real Estate Board are estimated to edge down 1 per cent to 4,790 units this year.  While continuing low mortgage rates are underpinning the market by helping to maintain affordability and consumer purchasing power, slower eonomic conditions and employment growth, consumer belt-tightening and more moderate net-migration are providing some headwinds to housing demand.  In addition, many recreational and investment buyers are being diverted to the United States by relative bargains.  Next year, we anticipate an improvement in consumer demand will be driven by stronger job growth locally and in Alberta, whose residents account for approximately 15 per cent of home sales in the Okanagan.  MLS residential sales in 2012 are forecast to increase 5 per cent to 5,020 units.

The average annual MLS residential price is forecast to edge down 3 per cent to $382,000 this year, after increasing 4 per cent in 2009.  The inventory of active residential listings remains relatively high.  This imbalance between supply and consumer demand is expected to keep home prices unchanged in 2012, albeit up 0.5% per cent to $384,000.

A signifcant accumulation of newly completed homes in the Kelowna market has hampered construction activity over the past two years.  However, there are some nascent signs of recovery in the multi-family market, which have posted double-digit growth this year.  Nonetheless, total multi-family starts remain a source of weakness in the Kelowna construction market, down nearly 20 per cent year-to-date.  Overall, we expect total housing starts in Kelowna to decline 3 per cent this year, followed by slight pick-up in activity next year to 8 per cent.

Source of Text and Charts: British Columbia Real Estate Association (BCREA)

Check out BCREA's Fourth Quarter November 2011Housing Forecast full report for BC's eleven Real Estate Boards

Interesting Kelowna current market facts:

"The Skinny" on Okanagan Buyers

Kelowna's $1-Million Plus Club

Insight into Kelowna Foreclosure Activity

October 2011 Kelowna Area Numbers