The day of rapid home price increases and subject-free offers may be coming to an end (even before BCFSA potentially implements the "cooling off'" period), if you are buying now might be a good time to get a bit more aggressive in your search as we are seeing competition fall off on homes signaling that prices may have plateaued for the short term anyway. I will continue to watch it daily. but multiple homes I was involved in this past week that were "taking offers" on a specific date didn't end up receiving offers.
Housing Affordability in Kelowna
Is there even such a thing these days? The increases this past year have not been incremental instead increasing by the price of a small condo. The good news for home buyers is we might be seeing prices plateauing (heavy emphasis on the might) but in the last week to 2 weeks, we are seeing the early signs of the pricing plateauing putting more power into the buyer's hands. Don't necessarily expect this to last too long, as inflationary pressures continue to drive the cost of goods up (look at gas prices) and supply chain constraints affect new supply. However, now we are seeing homes not get offers when they were "taking offers" and sellers are now having to settle to offers with subject conditions, a sign that we may be heading to more of a balanced market. If you plan on buying, now might be a good time to find what you are looking for. When we are looking at marketing a home one of the major things we look at is "who will buy my home and how much can they afford?"
Using this graph created by Mortgage Sandbox on affordability you can peg the price of your home and know the percentage of the population that would be able to qualify to purchase your home.
Of course, this does not include out-of-town buyers and does not take into account other things like other debt or past repayment history, however, it helps to give an idea of where income distribution is in Kelowna and the amount they can afford.
If your home needs some work done but you are on the fence about whether or not to do it, it is maybe worthwhile to get a second opinion. Some buyers may be able to get a mortgage that includes the purchase plus improvements, but some might not be able to or not want to do the work which can eliminate a certain amount of the market share.
Regardless of the situation, affordability continues to erode away as inflationary pressures devalue today's dollar and real estate prices continue to increase. Employer wage increases that follow inflation often are lagging as they are revised at the end of the year, another issue with mortgages as they often look at the last 2 years history, any changes in employment can affect these.
Have a great week and feel free to reach out if there is ever anything I can do for you!
-Mark
Mark Coons
REALTOR®
(250) 801-0361