VERNON – North Okanagan home prices may be a steal for those cashing out of the Vancouver area, but the hot market is also raising concerns about the overall cost and availability of housing in the community.
The average price for a single-family home in Vernon rose to $421,000 over the past six months, compared to $377,000 during the same time period in 2015.
The City of Vernon’s economic development manager Kevin Poole is calling it a crazy market, one with intense activity that hasn’t been seen in years.
From January to June, sales volume was up 61 per cent in the North Okanagan, representing a whopping $533 million in sales to date, compared to $331 million during the same time last year.
“It’s a seller’s market,” Poole says.
New construction is also moving along at a fast pace; so far this year, the city has issued double what it did last year in building permit values for residential, commercial and institutional construction starts ($88.8 million this year compared to $44.3 million during the same time in 2015.) Residential construction alone is up $8.4 million.
And while home prices may seem more expensive to locals, they are a deal for those cashing out of the Vancouver real estate market. Vernon-based Century 21 realtor John Deak estimates about 60 to 70 per cent of his clients are from the Lower Mainland.
“In Vancouver they’re selling an okay house for $1.3 million and they’re buying lake view and deluxe for $700,000 here in the Okanagan, and they can’t believe the discount,” Deak says.
His clients range from Lower Mainland retirees, to young families and professionals leaving Vancouver in search of affordability.
“I’m seeing a younger demographic, people say in their late 20s to early 30s who are completely priced out of the Lower Mainland. Their company might have an Okanagan division, so they obtain a transfer here,” Deak says.
With the market this hot, listings aren’t lasting long and you will likely have to pay more for what you want, or lower your expectations, Deak says.
“If you’re a buyer right now, it’s a tough gig. You have to be very fast and you have to change your expectations, whether that’s the price point, the number of bedrooms, the location or features,” Deak says.
And while the smoking hot market is a boon for sellers and those moving from pricier centres like the Lower Mainland, there are concerns about the impact on other individuals in the community. Annette Sharkey, the executive director for the Social Planning Council of the North Okanagan, says not everyone is so excited.
“We’re definitely feeling it in the community,” Sharkey says. “When the housing market is this hot, it does a couple different things. As the prices go up, of course it becomes more difficult to attract young families and professionals, who really drive our economy.”
At the same time, Sharkey says many property owners with rental units are jumping on the opportunity to sell.
“We see rentals flipped onto the real estate market, so we are also losing rentals,” Sharkey says.
The vacancy rate for rental units is already low in Vernon, just 3.4 per cent in the spring of 2015, while the cost of rent continues to climb.
“In addition to it being a hot market, we also have a low vacancy rate for rentals, so it becomes a landlord’s market,” Sharkey says. “It puts our most vulnerable population at risk — seniors, those on disability, single income families. Sleeping outside then becomes a reality, we’ve seen that with the increase in the number of homeless camps.”