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Everythings coming up roses in Kelowna

Posted On: 2009-11-03

Everything’s coming up roses in Kelowna’s real estate market
Tuesday, November 3rd, 2009 | 8:00 am

Signs of economic revival
By Kathy Michaels
Kelowna’s roller coaster real estate market is slowly reaching a state of equilibrium.
Paul Fabri, senior market analyst for the Canada Mortgage and Housing Corporation released a report this week outlining the ins and outs of the housing industry from sales to starts.
While this is clearly not a banner year, Fabri explained that demand for both new and existing housing is set to improve as the British Columbia and Canadian economies record stronger growth. Prices will start heading back up, too.
Total housing starts in the Kelowna Census Metropolitan area totalled 2,257 in 2008 and are forecasted to hit 650 in 2009 and 875 in 2010.
“Typically new home market lags simply because the supply of existing homes and new complete unoccupied homes have to be complete before builders get on it again,” said Fabri.
That supply should be reduced soon, and that will positively impact starts.
“Demand for single detached homes will lead, while apartment condo units will be slower to rebound,” he said, adding he expects to see constrained growth through the first half of 2010, and a wee bit more through the second half of 2010. And, he added, part of the market will bounce back eventually.
“We keep it in perspective, we saw five year straight of record growth,” he said. “That’s difficult to sustain… we won’t see that again next year, but down the road we’ll see it come.”
In terms of MLS sales, the lay of the land is a little less weak. Looking at all residential real estate, including apartments, townhouses and semi detached units all lumped together Kelowna had 3,445 sales in 2008, is expected to see 3,600 in 2009 and 4,100 in 2010.
Prices are following a similar pattern. The average MLS price in 2008 was $430,755, and is projected to hit $405,000 in 2009 and $425,000 in 2010.
“We’re expecting to see prices trend back up again from what we saw this year,” said Fabri, noting that pricing mirrors demand, and demand got stronger in light of some fortuitous conditions for new buyers.
“Strong price competition, a good selection of listings and favourable interest rates will help sustain growth in demand for existing homes next year. Expect existing home prices to edge back up as demand improves and the supply of listings is drawn down.”
Ultimately, for those who are interested in selling their homes, the future is looking brighter.
“Broader economic and employment growth will really tell the story about housing demand over the next year or so,” he said.
“The forecast is that the Canadian and B.C. economy will see stronger growth moving into 2010 although it will be modest.”
Population growth for B.C. is expected to pick up as well, and that, Fabri explained, that is a key factor in determining housing demand 2010.
Better yet, Kelowna’s economy is more well positioned to weather the economic storms than other economies due to growth at both the airport and UBC Okanagan.
“They have been a source of construction employment and have expanded the opportunity for more jobs,” he said.

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