Are North Okanagan Home Sellers Greedy?
When speaking with Okanagan home sellers 4-5 years ago, if I had told them, “your home will be worth 70-90% more that what it currently is today within 4 years, my Vernon home sellers would have been elated! Many might actually have planned early retirements, taken trips (if it hadn’t been for nasty covid), bought another investment property, spent frivolously before the money was in their pockets or just been content to sit on the idea of their new found future wealth. In any event, they would have been thrilled with the expected returns.
Unfortunately, easing out of a White-Hot North Okanagan Real Estate Market into a Red-Hot Market which is beginning to show signs of a further cool down with even more temperature drops on the horizon, with Bank of Canada’s second interest Rate hike coming June 1, 2022, I have seen some concerning signs of misguided expectations of future gains and perhaps even avarice.
Now to be fair, I am not sure where to lay the blame for this overly optimistic exuberance and unrealistic pricing expectation on the part of some Okanagan sellers. Whether it is the many uneducated agents, who do not watch the market closely, and without enough knowledge, agree to promote some overpriced Okanagan homes, or the influence of a neighbour who sold for a record high and the Vernon seller who decides they want 40% more than that last neighbourhood sale. Or even just that zany person who says “double it” to whatever market-based price recommendation is made, hoping to win the lottery!... No matter what the reasons may be, we are starting to see listings (especially in the Luxury market over $1 Million) sit on the market with little or no showings to the frustration of the Vernon Home Seller.
Even more frustration is being felt by the Okanagan home buyer - some who are very serious in wanting to relocate to the Okanagan, coming from other less desirable places to live in the world. As well as others, simply wanting to make a move locally for various reasons… the understanding that a buyer should only tolerate so much market exuberance, that it may be better to wait on a purchase, to not compete on a property, and sit it out until these pending interest rate hikes take effect and the ramifications can be assessed… is now a stark reality. This further impedes the quick sales Okanagan sellers have become used to when homes are priced beyond what the market will now bear.
On the flip side many would say it is actually the Okanagan Real Estate buyers who are driving the voracity…and the perfect example of this is the buyer’s who are throwing caution to the wind despite the potential for inflated pricing and future interest rates and still offering on homes in this market. This can recently be exemplified by our last 2 Vernon seller experiences (both listed under $700,000) the week of May 10-13, collectively generating 15 offers, pushing total values $167,000 higher than list price, with back up offers secured on both, with potential for generating even higher returns. Great for our sellers…driven by the buyers…this price push continues to be the norm on properly priced properties, as large number of buyers still wade into the North Okanagan Real Estate Market to find better value than other markets.
Yes, the North Okanagan market is still a seller’s market, however the volume of residential unit sales, according to the British Columbia Real Estate Association (BCREA) for April is down 34.9 percent from the same period, Jan-April, last year. Prices will continue to be strong here in 2022 and as a seller if you purchased 2 years or more ago, the profits are still good for you to take. But be cautious, as the market is cooling, if you want the profits out, your pricing needs to be on point, so that your property doesn’t sit, and you can go on to the next stage of Okanagan Real Estate or Life.
