Despite a summer lull in homes sales in the South Okanagan, indications suggest the local housing market could pick up in fall.
According to Dianna Smith, president of the South Okanagan Real Estate Board, the recent drop in sales is a trend that is relative to the season.
“We have a large inventory of homes right now on the market, which obviously weighs heavily in favour of buyers,” Smith said. “Our sales were down ... July over June, but that is somewhat seasonal.”
Being in the heart of the holiday season, Smith said many potential buyers are busy enjoying their summer vacation — therefore their money is being spent elsewhere rather than in the real estate market.
“July and August are usually slower and that’s because a lot of people are on holidays,” she said. “We traditionally pick up in September, and October is usually a very good month.”
Despite the drop in sales, a recent report released by the Real Estate Investment Network on the top B.C. investment towns ranked Penticton eighth on the list of 11 communities — Surrey was first and Kelowna fifth.
If the market picks up in September and October, as Smith said has been the pattern in the past, the homes will be there, particularly in the condo market.
In July, 139 apartment-style condos were listed in the South Okanagan with only 24 being reported as sold. In July of 2009, 89 apartment-style condos were listed with 37 being reported as sold.
That represents a 56 per cent increase in the number of listings, but a 35 per cent drop in units sold.
In townhouse-style condominiums, listings were similar over July 2009 and 2010, with 33 listed and 27 sold in 2009, and 34 listed in 2010 but only 15 sold, representing a 44 per cent drop in units sold.
A report released this month by the Landcor Data Corporation shows that while condo values witnessed a sharp decline in the second quarter of 2010, single family and attached homes have held their ground.
“Condos have been savaged; the more traditional, homey residential product has not,” according to the report.
The Landcor report indicates that condo prices in the Okanagan have seen an 18.5 per cent decline from the previous quarter, while detached homes were up 4.9 per cent and attached homes rose 4.5 per cent.
“Do we have a glut of condos? Absolutely,” Smith said. “I think everybody in the South Okanagan recognizes that. We have lots of new developments and they’re sitting there and it’s been a bit of a struggle to sell them.”
The attempts of trying to sell the remaining condos at Alysen Place in Penticton is an example of how the condo market is struggling in the South Okanagan.
With prices at Alysen Place dropping by up to 50 per cent, one bedroom plus den suites on the first floor were expected to go for between $189,900 and $224,900 at auction. The 870-square-foot suites were originally priced at $435,000.
The Aug. 21 auction at Alysen Place attracted about 100 people, according to Wilf Lethbridge, Alysen Place sales manager. However, he said they only managed to sell off two of the suites.
Lethbridge added that the drop in prices of the suites can be attributed to the state of the economy, which has forced people to be more cautious in the housing market.
“It’s more from the causes of the global economy,” Lethbridge said, “and just the confidence level of the buyer.”
However, Smith said buyers can expect to see a drop in prices no matter the type of dwelling, as the abundance of product has put everything in competition with each other, adjusting prices accordingly.
Smith added that although the “price point on single family houses obviously affects people, the rates help you be able to buy more.”
“The long-term (rates) are inching up a lot slower than they had anticipated, so that’s good for the people who are borrowing,” she said.
“Prices are really good. It’s like anything else, it runs in cycles. And usually by the time everybody realizes that it’s really picked up, all those good deals are gone.”
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