Penticton Western, Sunday, March 18th 2007 edition

Realtor predicts steady market Summary

Local real estate sales dropped last month compared to the same period last year, but bucked several provincial trends as the busy spring real estate season approaches.
Keith Jakes, with Re/Max Penticton Reality, predicts a "steady-as-she-goes" market.
"The spring market is going to be as good as last year," he said.
While Jakes expects that sales prices will go up by 10 to 12 per cent, that is half of past increases.

But South Okanagan remains an "attractive" market compared to the Lower Mainland, said Jakes, who expects that the market will not slow down any time soon.
"Personally, we are extremely busy," he said.

Numbers released this week show that local February sales dropped two per cent compared to February last year, according to the latest statistics from the South Okanagan Real Estate Board.

With sales down, active listing increased by 21 per cent from last February.
But the value of sales actually increased five per cent.
Provincial numbers paint a somewhat different picture. The provincial sales volume - like in the South Okanagan -rose. It reached $3.1 billion in February, an increase of 7.5 per cent.

But provincial sales dropped more than in the South Okanagan - four compared to two per cent - and active listing actually declined.
Cameron Muir, chief economist with the British Columbia Real Estate Association, predicts that home sales will remain above the long-term average this year, citing a provincial economy, rising wages and investment.

But regional differences in demand and supply will mean some areas of the province may experience higher price gain than others, he said.
One trend that will actually reverse itself is the strength of housing prices in the Lower Mainland.
Housing prices in the Interior will actually rise faster than in the Lower Mainland, he said.

"After experiencing rapidly rising home prices over the last four years, some low-equity home buyers are finding themselves at the wrong end of an affordability squeeze in these markets," said Muir.

But that is not necessarily the case in the southern Interior.

"The Kamloops, Kelowna and Penticton market have proven robust over the last 12 months, posting average price increases above 20 per cent," said Muir. "Strong employment growth, and an influx of recreational buyers, adult lifestyle buyers and investors are key market drivers," he added.

But it appears that local families are also still struggling to find appropriate homes.

"Good, quality" single-residental homes in the $300,000-$450,000 range are in short supply, said Jakes.
"Most real estate agents have buyers in that range," he said.
Those who purchase homes of lower quality also face significant costs.

The spring market season has begun with a number of significant developments. One is the release of figures that show Penticton's population grew by three per cent to around 32,000 during the latest census period ending in 2006, well below the provincial average of 5.3 per cent.

Other Okanagan communities, meanwhile, experienced more significant growth.
Jakes - like Mayor Jake Kimberley - is treating the latest census for Penticton with significant skepticism.

"I don't believe it," he said, pointing to the large number of new housing developments that have appeared around town in recent years. Another significant development in the real estate industry is the near-bankruptcy of New Century Financial Corp, a major mortgage firm in the United States.

This has increased concerns about the American real estate markets, where sales have slowed down significantly in recent months.
But Jakes said these developments south of the border will have "absolutely" no effects on the local real estate market.

The kind of high-risk mortgages that have pushed New Century Financial Corp to the edge of collapse are not allowed in Canada, he said.
Canadian mortgages are completely different, he added.

"Their (American) appetite for debt is far greater than ours," said Jakes.
A closer look at the latest real estate figures shows Naramata as the most expensive place to buy residential real estate, with an average sales prices of $699,750 in February.

Osoyoos ranked second at $455,000 and Kaleden/Okanagan Falls ranked third with $422,900. Homes in Summerland and Penticton sold for $394,744 and $339,067 respectively.

SOREB includes 281 member realtors and 31 real estate offices in the southern interior of B.C.