Momentum in the Okanagan residential real estate market (from Revelstoke south to the US border, east to Rock Creek and west to Eastgate Manning Park) continues. Sales remain strong, albeit at a more sustainable pace. The Association of Interior REALTORS® recorded 3,205 residential sales, worth $2.3 billion in the third quarter of 2021. The number and value of transactions declined 23.1% and 10.2% respectively, compared to Q3 2020. The slide reflects the strength of the market in the later part of 2020, not a collapse in 2021.
Sales throughout the summer of 2021 moderated as families shifted their focus. Travel and leisure activities increased after months of restrictions. Additionally, interior B.C. experienced one of its worst fire seasons on record. At one point, many residents were put on evacuation alert. Although, the number of transactions slowed down from record levels, the Okanagan market remains strong as sales continue to be above the 10-year average. The region is on track to set a record year with the number of homes sold surpassing 2016 highs.
The limited inventory for sale continues to be the main issue across the Association of Interior REALTORS® region. As of September 2021, there were 2,766 active residential listings throughout the market, a 40.5% decrease compared to the same period in 2020. Throughout all of 2021, the board has recorded the lowest number of active listings, compared to the same month, in at least a decade. On the bright side, the months of inventory, the ratio of homes available for sale relative to sales, has seen 6 months of consecutive increases. This is a result of the seasonal increase in properties available for sale and a temper in demand. The number of new listings coming into the market for the first 9 months of 2021 (14,488 units) is back in line with the 10-year average (14,593 units).
The trend of families relocating to the Okanagan, in search of a better lifestyle, increased housing demand exponentially during the pandemic. A recent report from BCREA estimates that at the height of the market, the number of buyers outpaced sellers in the region two-to-one. Demand for housing in the Okanagan continues to be hot, well above historical averages, but signs of an overheating market are easing. Multiple offers remain common, however, the number of offers per property has declined. Also, the number of unconditional offers which waved inspections have diminished. Yet, successful buyers are still writing strong and clean offers. Some buyers put forward bully offers, with prices well above asking, as they are desperate to get into the market. Limited spending opportunities throughout the pandemic combined with government assistance programs led to an increase in savings. In Q2 2021, the average household savings rate across the country was 14.2%, compared to 1.4% in Q2 2019. Many of these families are deploying such dollars into the housing market.
Motivated parties continue to move quickly through contracts, which has shortened due-diligence periods. The average days to sell among all property types has declined to 41 days in Q3 2021, the lowest number on record. This represents a 48.3% decline compared to the same period in 2020. Transaction times have shortened particularly for single family homes in the Central and North Okanagan, where the average days to sell is now 31-32 days, respectively. The strength of the demand throughout the pandemic created upward pressure on prices. The composite price for the Associationʼs area, across all property types, reached $665,000 in September of 2021. This is a 27.7% increase compared to September 2020. It is interesting to note that the benchmark price for single family homes showed its first monthover-month decline since the onset of the pandemic (-0.1%) in September 2021. However, price growth remains strong on a year-over-year basis, with a 30.5% increase compared to September 2020. It is too early to tell if prices have peaked or if the decrease will be short-lived following normal seasonal patterns.
Going forward not much is expected to change. The wave of infections from the Delta variant appears to be under control, yet the pandemic is far from over. Despite this, real estate market fundamentals remain strong in the Okanagan. Supply will continue to be the main drag, with limited relief from the new housing or rental market. However, the number of available listings is slowly increasing. Additionally, mortgage rates are expected to remain near record lows for the foreseeable future, which will continue to incentivize buyers to get into the market. While prices have recently increased, the Okanagan is more affordable compared to much of the province. Interior B.C. is one of the most desirable places to live thanks to its proximity to nature, mild climate, and vibrant economy. Unemployment in the Thompson-Okanagan region was 5.4% in September 2021, well below the national and provincial averages of 7.3% and 6.5%, respectively. Employment is well above pre-pandemic levels with most gains in full-time employment.
Association of Interior Realtors