Nanaimo Real Estate Market Report: January 2023 – Nanaimo News NOW
The Okanagan single-family home market appears to be feeling the impact of higher interest rates.
The Association of Interior Realtors released data for January showing that benchmark home prices fell across the region in January.
Prices fell between five and almost eight percent compared to January 2022.
“Last year, when a customer could afford a purchase of, say, $380,000, with an income of $80,000 for their year, this year it’s only about $340,000, so it’s a big difference,” says Deb White, owner of White House Mortgages in Vernon.
Although prices of detached houses are low, they have not plummeted and are not expected to.
“In the Okanagan, we are unlikely to see a massive drop in house prices because we are one of the most desirable areas to live in Canada in terms of climate and demographics, there is a large portion of the population ready for retirement and will likely looking at the Okanagan,” realtor Maria Besso said.
White paints a similar picture, saying the Okanagan real estate market is continuing with people simply finding more creative ways to buy a home in the higher-interest-rate climate.
“Whether they’re selling a car for their down payment, or borrowing money from their family, they find it more affordable to buy a house rather than rent,” White said.
Meanwhile, apartment and apartment trends are mixed depending on where in the region you look.
In January, benchmark prices fell four percent in the Central Okanagan, while rising almost six percent in the North Okanagan.
Particularly in the northern Okanagan, with interest rates rising, there seems to be a clear trend for buyers to opt for smaller, more affordable properties. Prices of detached houses fell in January, while prices of apartments and townhouses rose.
“What we’re seeing is seven percent stress testing and so there’s a finite amount of money people can qualify for and so there’s more demand in the lower end of the price ranges,” Besso said.
“There’s also competition because the retirees are coming here, maybe wanting to downsize, and also looking under $800,000. So they’re competing for the same houses maybe as the younger generation.”
A variety of trends to watch out for as the Okanagan enters the traditionally warmer spring real estate market.