As 2020 comes to a close and looking back it was a roller coaster of a year. A lot of unknowns's and there continues to be a great deal to be figured out across the globe.
2020 was a year that buyers took a leap and bought higher-valued homes here in the Okanagan while utilizing the low-interest rates.
The dollar volume of homes sold in the Central Okanagan blew past any other year. Just under 3.9-Billion dollars of homes were sold so far in 2020 with 2016 being the next closest at $3.4 Billion.
Looking at 2020 for the real estate market in Kelowna it was a year that appears to have been fueled by low interest rates. The low interest rates are making payments easier and we are seeing people move up and purchase higher valued homes compared to the last 3 years.
So far in 2020 with 3 days left as I am writing this there were 6,070 sales for 2020 which was behind 2017 numbers of 6,326 but close to 20% better than '18 and '19 were and only 27% behind both those years combined. 2020may have had the opportunity to beat out 2016/2017 however, low supply appears to have hindered the number of sales.
2020 was a year buying habits changed. People are now working for home and needing that extra bedroom and den. People are not travelling anymore so they are looking to put in pools or hot tubs. There is a shortage of hot tubs and August is the earliest I have heard you might be able to get one in depending on where you buy from.
With buying habits changing people also bought more lakeshore properties than before. This year over $275M of lakeshore homes have sold which is over $100M than it was in previous years. Low-interest rates and people changing buying habits has really driven the housing market through 2020.
2021 what to expect? other than to expect the unexpected? Tough to say what next year will be like neighbouring 2020 which will go down in history.
Nobody knows what will happen in 2021 but it will likely hinge on where interest rates head. If there is an increase we could see a drop in demand however, it is expected interest rates are to be low for the next while.
What we know in 2020 is that 40% of the home buyers in the Central Okanagan since Covid started were from outside the Central Okanagan, which indicates that people are looking at the Okanagan as a desirable place to live.
People are going bigger- they are needing that extra bedroom or den with working from home no longer a fantasy. Look for fewer studio condos being built and buyers looking to buy with extra space.
We could also see a baby-boom. I am not sure if it is just your usual Christmas announcements for baby's on the way but I have seen a lot on my feed. With people forced to be spending more time at home, we may see more babies on the way, which will spur people to need more bedrooms.
All in all, who knows what will happen. Your guess is as good as mine. In the short term, it is looking that the housing market will continue on the same path it currently is on. If there was anything 2020 taught us is that we shouldn't plan or project out too far, the thing can change on a dime.
-Have a great week and Happy New Year!.
Mark