After flirting with the half-million mark in June and July this year, the average single-family house now goes for over $500,000 in the South Okanagan.                                Submitted photo

After flirting with the half-million mark in June and July this year, the average single-family house now goes for over $500,000 in the South Okanagan. Submitted photo

Cost of housing continues to skyrocket in South Okanagan

A single-family house now costs over $500,000 on average in region’s red-hot real estate market

The cost of housing in the South Okanagan is continuing to rise rapidly, with 2017 real estate sales looking to top $1 billion by the end of October.

The South Okanagan is on track to see another record year of real estate sales, despite tighter mortgage restrictions from the Canadian Mortgage and Housing Corporation and hiked interest rates from the Bank of Canada.

By the end of September, 2,073 sales have seen $955 million trade hands in the South Okanagan, $105 million of which came in September alone.

Related: High demand and few listings cause soaring house prices

As the region enters the fourth quarter of 2017, Pamela Hanson, South Okanagan Real Estate Board president, said she foresees another record year after last year topped the $1-billion mark for the first time.

Though the total number of properties listed is still down from last year, looking just at residential properties, that number (3,043 year-to-date) is up slightly from last year (2,962).

But in the month of September, that bump is greatly increased — new listings in September 2017 are up 14 per cent over September 2016. That’s a change from the end of the second quarter this year, when the monthly number of properties sold was still lower than the year before.

“The reason that there are less properties sold is because we’ve had a shortage of listings,” she said. “All of a sudden, we’ve got a whole bunch of new properties coming on the market, and we have all these buyers, it’s just finding the right match.”

Related: Many motel sales signal strong real estate market

The average residential property went for $421,000 in September, up six per cent over the average price for all of 2017 and up almost 17 per cent over September 2016.

If you’re buying a single-family house, the cost increase is even more severe, topping $500,000 after flirting with the half-million mark in June and July. At $516,000, that’s an increase of 10 per cent over 2017’s average and 22 per cent over September 2016.

Just one housing unit was sold for under $30,000 in the South Okanagan in September, while 49 units sold for $200,000 to $300,000. Sixty-eight homes sold for over $500,000 last month, 18 of which sold for more than $750,000.

And the cost of housing is going up rapidly, Hanson said, with some feeling priced out of homes they were ready to buy only a few weeks earlier.

Related: City must ‘atone’ for its part in housing crisis: city planner

“I had a family purchase a home up in Sendero (Canyon) and in the time that it took to remove subjects, the house price had already gone up (increased in value) by $25,000 because enough had been sold that they could charge more,” Hanson said.

Removing subjects refers to fulfilling some commitments as part of finalizing a mortgage, from filling out documents to financing, and typically takes about seven days, according to the Bridgewell Real Estate Group website.

But that rapid price increase has been part of the drive in an increase of listings recently, according to Hanson — more homeowners who have considered selling in the past are seeing a trend and hoping to make their sale during a high point.

“If they’re going to sell, and if their whole objective is to just get the most money possible for their home, it’s now,” she said. “When you look at the history of the past 30 years and the cycle that’s happened, we’re in that kind of upper end, and we’ve surpassed where prices were back in 2003 to 2005.”

Related: Nearly two-in-five renters live in inadequate housing: report

The crest of a wave of housing prices is almost always followed by a trough — though rarely as severe as the 2008 crash — but Hanson said there have been some worries that the cost of housing could continue to rise, with little land to work with in the Okanagan Valley.

“We have no crystal ball, but I know that people are thinking, ‘OK, so things could go down, but what if they don’t? What if they continue to go up, and their plan was to be in the South Okanagan, and now we’re priced completely out of ever buying here?’” Hanson said.

“What if this ride is a four-year ride? What if it’s four more years of prices going up, and we never actually go back down to where we were? We just don’t know. Prices have doubled in other cities in the last 15 years.”

Related: Motel fire highlights Penticton’s housing crisis


@dustinrgodfrey

dustin.godfrey@pentictonwesternnews.com

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