Prices tumble as interest rates, winter slowdown cool off housing market

Photo: Contributed

January is normally a slow real estate month, and this year was no exception.

The slowdown, combined with rising interest rates, resulted in benchmark prices falling throughout the Central and North Okanagan in most housing categories.

According to Association of Interior Realtors statistics released Monday, there were 552 residential unit sales last month across the region, which includes the entire Okanagan, and the Kamloops Kootenay and South Peace River regions. That was nearly half the number of sales from last January.

“This dampening in sales activity is not unexpected given current market conditions,” AIR president Lyndi Cruickshank said in a press release. “Specifically, the cost of borrowing has risen over the course of the year and weighs heavily on homebuyers’ plans. Demand is still strong, but high interest rates will likely continue to make for a slow first quarter in real estate activity.”

The benchmark price of a single-family home in the Central Okanagan fell below the $1 million mark for the third time in the last five months, checking in at $976,800. That marks the lowest the price has been since October 2021.

Central Okanagan’s condominium benchmark price dropped 2% to $492,000 from December, but the region’s townhome mark increased 2.1% to $741,600.

The benchmark prices of single-family homes and townhouses in the North Okanagan both dropped significantly in January, down 2.9% and 4.1%, respectively, from December.

“Despite an increase in inventory, there is still a lack of affordable housing, which is compounded by the high interest rates,” Cruickshank said. “We are seeing buyers and sellers holding off on their real estate intentions as their money just doesn’t get them as far as what it used to.”

The average number of days to sell a single-family home in the Central Okanagan, which is a good barometer to watch, increased to 81 days from just 64 in December.

Photo: Contributed