Thursday, October 15, 2009

The trickle up effect

We've all heard of a "trickle down effect", but what about the trickle up?
The kelowna real estate market has experienced a major shift in the last 12 - 18 months. From an extreme sellers market, things quickly turned around to become a buyers market. The laws of supply and demand then took effect to create a strong balanced market that we're in right now. The problem for some sellers however, is that they're priced in a range that's not getting much action. This is where we're now seeing the "trickle up" effect happening.
Back when the prices first tumbled we saw a huge number of investors and first time buyers snapping everything up in the $300-$400K range. The homes that those people bought created a new group of sellers moving up to the $400-$500K range. When those sellers sold to those buyers, it created a new group of buyers looking in the $500-$600K range... and so on.
At long last, this "trickle up" effect seems to be taking hold. When you look at the number of sales over the last few months between $600K and $1 million the numbers are growing... 16, 20, 23, 27, 33.
Confidence is gaining momentum and people that have been taking "wait and see" approach are gradually coming down off the fence. I believe we can expect to see the real estate market remain strong!
Talk to you soon...

Monday, October 5, 2009

Is lakeshore real estate on an upward trend?

In the last 3 weeks I've had 5 calls from clients inquiring about purchasing lakeshore property. For the most part they're feeling that waterfront is a limited commodity (agreed) and that prices will come back and start rising (agreed) and that Kelowna has only just begun to see it's international reputation grow (agreed again)! While not disputing that real estate in Kelowna is expensive, when you compare waterfront prices to other parts of the world it makes it seem downright affordable! If you take a $4 million dollar lakefront home in Kelowna and move it to Vancouver, you'd pay over $14 million and in Victoria the same home would fetch almosts $7.5 million. Coldwell Banker article about Canadian affordability
Now that's not to say that all lakefront property in Kelowna is that expensive. For just over $1.1 million you can own waterfront on Okanagan Lake... the house is a "fixer upper". Prices wander up from there to a staggering $10,000,000 for home and waterfront lot.
Consider this as well... in 2006 there were 90 lakefront sales, 2007 saw 112. In 2008 we saw sales dip to 58 and 2009 YTD we're at 54. Food for thought?
Talk to you soon...