Where's the Bubble?
Buyers are starting to sit on the sidelines as they continue to read and hear more and more that we are heading for a global recession. Many believe with the recession in the Okanagan the home prices will fall and they will get some terrific deals. I will not argue that there is a global recession coming, especially where you hear that over 400 out of 400 CFO’s from Fortune 500 companies took a survey and all agree it is on the horizon. The better questions are when and what will that look like?
Although the Fed in the US and in Canada both raised rates in June and the next announcement in Canada is July 13. They are expecting another rate increase anywhere from 50 to 75 basis points in July. Now I won’t get into how I personally believe both governments did not act soon enough to start attacking inflation last year, but I will address what it means for us now and in the near future. Here in BC, the job report just came out and BC has the lowest unemployment rate in Canada and according to BC's latest Labour Market Outlook, it forecast over 1 million job openings into the next decade. (https://news.gov.bc.ca/releases/2022AEST0004-000172)
What does this mean for Buyers and Sellers in North Okanagan Real Estate? With a strong job market and still low supply, the Market and pricing for Vernon Home Sellers will stay strong for the summer and early fall. As of June 13 for the North Okanagan the following is noted for supply of listings and sold:
2022 active listings = 1728 and sold listings = 1128 compared to 2021 = 1811 active listings and 1545 sold listings.
So yes the market (North Okanagan Home Sales) is cooling and will continue to slow here in 2022 and move to a more balanced market however there is no bubble for buyers. Prices are not going to crash this year or next year!
After the World Mortgage/Real Estate crash in 2007-2008 - the Okanagan did not really feel it until 2010-2014 where we saw a huge slow down in sales but prices stayed firm. Days on market rose and it took more time to sell but there was not a crash in prices. Speaking with my father about the recession in 1991-1993 when he was an agent in the Vernon and Kelowna Real Estate markets he said again the days on market rose but prices flat-lined.
Buyers sitting on the sidelines waiting for the crash will only miss out as interest rates rise and the cost of buying rises while home prices here in Vernon stay strong with low supply and a strong job market.
