This past weeks market, we continue to see new listing more and more heavily out weigh the sold's, as well the price changes down are increasing.
Judging by the weekly activity dropping off with the amount of sales in the last week compared to the sales in previous weeks. It appears buyers are holding out, for the time being.
Whether its due to banks further tightening up before the next rate announcement on June 1st, or buyers that are not desperate to buy holding out to see what impact the rate increase will have.
This week the amount of solds dropped off by around 30-40% from the normal weekly activity we have experienced for months.
When determining whether the market is a buyers or seller market, the typical metric is to use months of inventory. Which will tell you if there are no new homes that come on the market based on current sales, how long will it take to deplete the inventory to "0". Anywhere from 4-6 months, is considered a balanced market, less than 4 months is considered a sellers market and I am sure you guessed what 6+ months is considered.
For a healthy market the aim is to be in the 4-6 months of inventory range, less inventory typically means rising prices, higher inventory will usually mean a decrease in prices.
The next hottest market, next to the market we are in, was 2016/2017. During that time for the entire year the months of inventory was at 4.2 and 4.1 respectively. Before increasing to 6.7 and 7.7 in the 2 years to follow (2018/2019).
2020 was a different year to say the least, a lot changed that year. Using the inventory metric it started the year at 8 months on market, jumping to 12 months as lockdowns happened in April and then got as low as 2.7 months on market by November. It was all over the map. In 2022 the average months of inventory has been sitting at 2.1 up until May. Currently in May so far we are at 4 months of inventory which is a move to a more balanced market.
The one thing with using this metric is that it doesn't measure all the different aspects of supply and demand. Supply on the market is definitely increasing and has been over the last 3 months. This situation for the Okanagan is more of reduced demand, whether it be for a brief moment or an extended period of time...... only time will tell. Demand can also be triggered by a number of different factors including weather, interest rates, policy changes...etc. there are so many factors it is tough to pin point. This reduction in demand is likely buyers just putting a pause as they are seeing prices steady out and voting to hold out until they see if prices decline.
The metrics for the Okanagan still remain strong with 50% of buyers being from outside the Okanagan, this shift may give people waiting on the sidelines the chance to get in.
Let me know if there is anything I can do for you!
Have a great week and feel free to reach out with any questions!
Personal Real Estate Corporation
Coldwell Banker Horizon Realty
2021 Top 3% Internationally Coldwell Banker