Real estate services were considered an essential service during the pandemic, so as realtors we would screen clients and wear masks and gloves or hand sanitizer in order to view a home. Once the lockdown ended the market went a bit crazy with latent pent up demand.In spite of the Covid-19 pandemic, the real estate market in Peachland and the Central Okanagan was very strong. Low inventory, very low interest rates for mortgages, and a general trend of people working from home and retrenching their lifestyle to reflect being at home much more than in the past - all this contributed for a strong demand for houses in particular. A strong trend of buyers from the lower mainland plus other provinces contributed to the market rising as the year went on. The Central Okanagan area is Peachland to Lake Country including Kelowna.
Activity for Houses:
We can see looking back over the year that median price for single family homes (houses) increased in value by 14%. Inventory struggled to keep up with demand even though it was much higher than 2019.
2758 houses sold in 2020 versus 2045 in 2019, a 34% increase in sales.
Activity for Condos:
A different story. The median price for condos in January was $355,000, and in December, $356,000. The stronger market absorbed excess inventory left over form 2019 plus new listings from 2020. Inventory rose this year as well as sales, but not enough to raise prices overall. 1,333 condos sold in 2020 versus 1181 in 2019. Condos have headwinds with rising insurance costs and covid restrictions in common areas of the complex.
Activity for Townhouse:
Townhouse as strongly as houses. Median price increased from $457,000 in January to $535,000 in December. A 17% increase. Inventory rose all year after the lockdown. 1027 townhomes sold in 2020 versus 791 in 2019, a 30% increase in sales activity. Townhouse are more affordable but not as cumbersome in a pandemic as condos, where you can’t share an elevator with strangers and have to wear masks in the lobby.
Activity for Building Lots:
Sales of building lots were also quite strong. The median price in January was $247,000 increasing to $283,000 in December. This is reflecting in rising construction activity for new homes across the valley.
306 building lots sold in 2020 versus 163 in 2019, an increase of 87%, while inventory rose sharply rising 88%. Low interest rates and demand for new homes will continue to drive lots sales and sales of new homes.
Keep in mind the market performance did all of this without immigration. Driven by lifestyle changes form Covid - people leaving crowded urban areas for smaller cities, as well as historically low interest rates.
Immigration will be a strong driver once borders open again. Rising to 400,000 per year across Canada. The lower mainland is expecting a surge of immigrants from Asia. Its reasonable to say European immigrants will be strong as well. Add that to provincial immigration and you have a recipe for strong demand for all types of housing in 2021 and 2022. We have not seen a market this strong since 2007.
Across Canada CREA (Canadian real estate association) forecasts an overall rise in price by 9% for 2021. A record year is their prediction. National sales volume is expected to rise by 7%. Due to low inventory versus demand, single family detached homes will again be the darling of the real estate sector.
Buy land! They don’t make it anymore!