Dave Favell

Dave Favell is a managing broker at Royal LePage Kelowna.

The real estate reset button has been firmly hit in Kelowna.

The Royal LePage House Price Survey for the fourth quarter is the latest document to point out there’s been a correction, a rebalancing and recalibration in home sales and prices.

Basically, the overheated market has cooled. Sales are down 20 per cent compared with the past year, and the average selling price is also down about 20 per cent compared to July’s record high.

However, Royal LePage’s report takes a roundabout way of getting there.

Initially, the survey shows the aggregate home price in the city in the fourth quarter at $650,438, up 3.6 per cent from the last three months of 2017.

Aggregate combines the average selling prices of all kinds of housing — single-family detached, duplex, townhouse and condominium — to come up with one benchmark.

Median price is used for two-storey homes (up 2.5 per cent to $736,442), bungalows (up 3.3 per cent to $653,259) and condos (up 10 per cent to $421,512).

That all sounds good.

Prices were up in the fourth quarter compared with a year before.

But what the survey doesn’t reflect is the average selling price of a single-family detached home hit a record high of $782,398 in July.

So, in reality, house prices are down dramatically in five months.

“Yes, when you look at those year-to-date figures, prices are up,” said Dave Favell, one of the managing brokers at Royal LePage Kelowna.

“But the market has slowed sales-wise in the past six months, and prices have come down, too.”

Despite the drops, Kelowna still has a healthy, balanced real estate market.

The market of early 2017 was overheated, fuelled by buyers from Vancouver who sold their homes for $1.8 million and bought in Kelowna for half the price.

Since then, the Asian money flow to Vancouver has dried up and the effect has rippled out to Kelowna.

In addition, mortgage qualification rules have tightened, rock-bottom mortgage interest rates have inched up and a provincial speculation tax was implemented.

Thus, Kelowna’s new market relies almost solely on locals, including first-time buyers, move-up buyers and downsizers, and those who move here to retire or work.

“In the fourth quarter, the market in Kelowna remained balanced, reflecting increased demand from young families and millennials looking to find a home for good value,” said Royal LePage Kelowna owner Francis Braam.

“The housing market is showing signs of stabilizing from the impacts of government regulations aimed at cooling the market.”

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