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Consumer confidence returns to Kelowna housing market

It's been absent for a year, but it's back.

We're talking about consumer confidence in the Kelowna housing market.

After a post-pandemic buying frenzy pushed home prices to all-time highs, inflation went on a tear, mortgage interest rates skyrocketed and home sellers and buyers were scared off, resulting in a sales slump and price slippage.

Recently, inflation has tamed and mortgage interest rates are set to come down.

The scenario has boosted consumer confidence, spurred a bit of a sales rally and nudged prices up.

<who>Photo credit: Association of Interior Realtors</who>Kaytee Sharun is the president of the 2,600-member Association of Interior Realtors.

"There seems to be a return of consumer confidence with the gap between buyers' and sellers' expectations narrowing that has helped ramp up market activity after a muted first quarter," said

Kaytee Sharun, president of the 2,600-member Association of Interior Realtors.

Just-released figures from the association show that in Kelowna in May 394 homes of all kinds (single-family, townhouse and condominium) sold, a modest bump from the 370 sales in April.

While slight, the movement is in a positive direction, again indicating an improving spring market and people's willingness to make a house selling or buying decision.

Prices are more of a mixed bag.

<who>Photo credit:</who>This two-bedroom, two-bathroom, 1,415-square-foot house on Gallaghers Edgewood Drive is listed for sale for $1,015,000, which is pretty much bang on the benchmark selling price of $1,015,700 of a typical single-family home in Kelowna in May.

Last month, the benchmark selling price of a typical single-family home in the city was $1,015,700, up a bit from $1,009,000 in April.

The benchmark still has a way to go to hit the record high $1,131,800 it was in April 2022.

The May benchmark for a townhouse -- $724,300 -- was actually down from April's $734,600 and substantially down from May 2022's record high of $829,000.

The May benchmark for a condo was also off slightly -- $507,500 -- compared to April's $508,200 and well off April 2022's record high of $557,700.

Royal LePage is predicting price recovery as much as 10% this year, which could put Kelowna prices within striking distance of record highs.

Even with prices below peak, the Kelowna housing market is considered highly unaffordable.

Even with soft demand, prices didn't plummet as much as they could have because there's a housing shortage and values hold more so in such a scenario.

However, with the renewed consumer confidence, more homeowners are putting their properties up for sale in hopes they'll get a good price.

Consumer confidence at the other end of the equation -- potential buyers -- means buyer's are willing to pay more to get what they want.

Thus, this buyer's market -- where buyers could take their time and negotiate lower prices -- is shifting to a balanced market with buyers and sellers on more equal ground.

"With a healthy dose of inventory, we are seeing more balanced market conditions after years of the pendulum mostly swinging in the direction of a sellers' market," said Sharun.

It was definitely a sellers' market in early 2022 when demand pushed prices to all-time highs as buyers scrambled to purchase, often getting in a bidding war and paying over the asking price.

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