Kelowna Housing Market is Changing

Many of the new changes to the housing market have happened within the few months. Buyers emerging real estate preferences have changed how we sell real estate and require thoughtful consideration when listing your home for sale.

Timing is a critical factor in a successful home sale. Watch the inventory carefully. If you sell your home with nine other competing houses, you will need to be the best in show at a competitive price to get the buyer.

Subtle changes make a difference in how well a home does as far as the sale price. Those “little things” add up to be big things, especially in the luxury market.

Here is my Top 10 list for Sellers on a winning sales strategy for your home in today’s changing market:

1. Timing is everything

List your home when there is low inventory in your price point. You can watch the market with your agent by requesting a subscription to the MLS so you can monitor local activity for months before you hit the market. The best seasonal time in Kelowna is typically March through August, but a low inventory market can push those great sales into autumn. Avoid listing your home when there are many houses similar to yours on the market. If that is not possible, then look to condition and price to beat the market inventory.

2. Move in Ready

This is the biggest shift in housing, and there are many contributing factors to this shift. Buyers have busier lives than in the past and less disposable cash for repairs and remodels. Both spouses typically work, making managing a remodeling project nearly impossible. The contractor pool has diminished with nearly zero unemployment, and trying to get a contractor to come to your home to remodel a kitchen or bathroom, let alone a whole house remodel, has become a huge issue. Compound that with costs due to the supply issues, and it just makes sense to buy a move-in ready house. In the end, move-in ready is more affordable and easier on the buyer’s lifestyle.

3. Inventory

High inventory in your price range? You may want to wait to list your home. Ask your realtor how many months of inventory are on the market in your price range?. Then ask how many houses sold in the last 6 months to gauge how quickly the inventory is selling. In some luxury markets, we have 18 months of inventory—a cautionary tale for those selling their million-dollar homes. You may have to price your home very aggressively to take advantage of the end of this great housing market and make sure your condition is premium. Take a tour with your realtor to view all the homes for sale you are competing with before you price your home.

4. Interest Rates... oh my!  

Interest rates are steadily rising, this has greatly impacted the buyer pool, as a dual licensed Mortgage Specialist and Realtor, I can attest to how difficult it is for first time buyers to jump into this market. For luxury listings, the sliding scale for borrowers is also becoming more difficult. Most people who wanted to buy in 2022 are realizing it's now or wait a year to two, with rates expected to increase more before the end of the year.

As of yesterday, I saw a rate of 5.84% come across my desk. This means if a buyer wants a five year fixed rate, they have to qualify at the greater of the contract rate by 2%. Qualifying at 7.84% means a lot less house than just a few months ago. I encourage my buyers to get a variable rate mortgage, you can still qualify for these with the benchmark rate of 5.25%, but this is expected to change shortly. So we are seeing those that do want to buy, wanting to do it soon.

5. Pricing is EVERYTHING

Almost all listings are now seeing "Price Changes". Sellers have to walk into the market knowing that it is not the same frenzy it was only a few months ago. Make sure you listen to your agent as they prepare the data, and make special note of the days on market. If you price your property right straight out of the gate, you will sell before all the older, stale listings. Once a property has been for sale for over 30 days, you will struggle to the eyes on it that the first week allows. Pricing it right will result in the interest and the sale.

6. Lifestyles

Buyers' lifestyle is more important than their housing. This happened quickly. People are trading in the big house in the suburbs for travel and enjoyment. This explains why the millennials and the baby boomers are both converging on smaller, well-done homes. Have this in mind when listing your home for sale. It is all about price, condition, and location (in that order) now.

7. School Districts

This has always been true. Make sure your realtor has the latest school information to share with prospective buyers. Each community has specific information that can be printed out and uploaded to your MLS Feed on your home. Make sure that information is readily available to buyers.

8. Surveillance 

80% of all the houses we now sell have inside and outside surveillance systems. Conversations regarding negotiations should be kept at a minimum inside the home. Alexa, RING, and Google all have smart devices to see and hear you in a home. You may want to consider surveillance devices for your home sale if you are concerned about safety and valuables in your home. Knowing when someone is coming or going can be a valuable tool in the sale of your home.

9. The millennial impact on housing

The new age buyers typically do not buy up to their limit. They are conservative. They have busy lives with two working spouse families, so the condition of the home is very important to them. They do not have time to meet with contractors and remodel a new kitchen. They are short on readily available cash but can finance the new home just fine. Doing a kitchen or a bathroom remodel can seem overwhelming to them, you should consider doing a kitchen or bath refacing before you hit the market to appeal to this new buyer pool. Make sure your home is as move-in ready as possible.

10. Photography

Photos are your calling card to your buyer. They should be as perfect as you can get them! Seasonal photos become so important. Fresh spring photos stand out in January and entice buyers to see your home above all others. High definition photos, drone, and a 3D Video tour should all be considerations in your agent’s marketing of your home. Your photos, once out there, are the most important marketing tool you have, so be picky and make sure your agent is using the very best technology to sell your home. Regardless of how inexpensive or luxury your home is, it really is the photography that will entice buyers.