Is the Kelowna Real Estate Market Changing?

Is the market changing? For the last couple of months, it has been pedal to the metal for the real estate market. But how sustainable is it? Is there an end in sight? Prices are increasing but where will it end? Nobody knows, I mean look at lumber prices. Inflation is starting to take a toll and these price increases could be the market making up for the inflation. In the real estate market, the one thing we normally look at when looking at the market is supply in demand. Right now there has been high demand and supply has had issues keeping up with the demand. One way we keep track of that is with a stat called "months of inventory" this is what is often used to determine if it is a buyers market, seller's market, or a balanced market. Watching these numbers cangive us a sense of when a market is changing. Emphasis on the "can" as it's one out many indicators that play a role in the market. Right now, we don't need to know the stat to know it is a seller's market (for reference anything under 4 months of inventory is considered a seller's market) 4-6 months is considered balanced and 6+ months is considered a buyers market. This indicates if no new listings come on the market and considering all other things equal(demand remains the same) how long will it take to sell out of the current inventory and there be no homes on the market. For the entire Central Okanagan Real Estate market (homes, townhomes, mobile homes, lots, etc) in April, the month of inventory was a measly 1.53. Get this, last April with all the doubt and uncertainty the months of inventory was a whopping 12 months of inventory. Talk about a buyers market. But where are we at in 2021? Are things changing? The months of inventory were up in April up from 1.39 in March. Based on the current sales of 466 so far in May and expecting the same demand as this past week (224 sales or 32 sales a day)The remaining 13 days of May we should end up with around 882 total sales in May. Assuming inventory stays where it is currently the months of inventory would be around 1.64, even if we err on the side of caution and say 800 sales (not 882) the months of inventory would be around 1.8. The months of inventory could be signaling a change in the market but I am not so convinced quite yet. There was a lot of external pressures introduced in the market from Governments (travel restrictions, stress test). The reason why I am not so convinced is prices are increasing, people are adjusting. Right now there are on the market right now 1,447 active listings in May compared to at the end of March at 1,401 total listings and April with 1,414 listings which is a bit of a change but a difference of 46 listings is the equivalent of a day and a half of sales for what we are averaging so that can change fast. Inventory really isn't increasing. What interests me the most is the total volume of listings on the market, right now there is $1.647 Billion worth of real estate active right now in the Central Okanagan, April this number was $1.587 Billion and March was $1.499 Billion. Why this interests me more than anything else is the fact that dollar volume of listings is up $148 Million from March. Prices are increasing, some of the inventory might be "reaching" for a sale price really testing the limits of the market. May so far has seen 466 sales and in the last 7 days has 224 sales, which is projecting a total of 914 sales in May. April saw 926 sales and March saw 1010 sales. Is the market shifting? Give it another month and we might have a better idea. I think it's too early to say. Prices are still increasing, the market may need a bit more time to adjust to the new pricing and as Government restrictions possibly relax people likely will get back to their plans. Have a great week and reach out if there is anything in the world I can do for you.

-Mark