Continuing the trend this week as part of the mid year real estate market, we are looking at the latest report from the Association of Interior realtors report for Q2. Really, there are no surprises, but just for another perspective directly from the Association of Interior Realtors second quarter market overview. Throughout the second quarter of 2023, the Okanagan real estate market experienced a decrease in activity, yet it remained steady, akin to the sales levels seen in 2019. The region is currently undergoing a reversion to the mean, indicating a shift back to more typical market conditions. Despite prevailing interest rates, buyers continue to remain active but are sensitive to pricing. Consequently, real estate transactions in the Okanagan have fallen below the10-year average every month this year. The Association of Interior REALTORS® transacted 2,885 residential sales in the region, worth $2.2 billion, in the second quarter of 2023. This represents 3.7% and 8.0% declines, respectively, compared to the same period in2022.
Amidst rising interest rates, first-time home buyer sremained active in the region during Q2 2023, accounting for 15% to 20% of transactions, consistent with the past decade's trend. However, both newcomers and those lacking substantial home equity face challenges in the current market due to a limited inventory of homes under $525,000, the threshold for the B.C. land transfer tax rebate. This scarcity has led to pent-up demand for affordable properties, prompting buyers to explore creative options, such as properties with a rental suite, which make it easier for buyers to qualify for a higher mortgage amount.
In Q2 2023, repeat buyers led real estate activity in the Okanagan, accounting for 72.79% of transactions, a 10- year high for seasonally adjusted ratios. Their resilience to rising interest rates is aided by the equity gained from the recent surge in home prices. In June 2023, 41.2% of buyers made all-cash offers, as per the Association's buyers survey*.
Q2 2023 saw the Okanagan’s residential inventories reach its highest level since 2015, but not due to more properties being listed for sale. New listings hitting the market in Q2 2023 actually dropped by 11.7% compared to the previous year, with only 5,802 recorded. Contrary to expectations, rising interest rates and lower prices did not force many homeowners to sell; instead, a significant number with no or low mortgages stayed put. The slowdown in sales led to a 13.0% rise in residential inventories, offering more options to buyers and hesitant pandemic sellers seeking new homes.
*This data reflects buyers of homes within the Association’s region and is obtained through a monthly survey that REALTOR® members complete, based on home sales that close in the month the survey data reflects
Hope everyone has a great week!!!!!! If you have any questions, want a home value estimate, looking for a new home. It can be as simple as clicking here to schedule a meeting Mark and Maddie