Why will the Okanagan keep on truckin'
Excerpt from Castanet news article
"Canada’s resale housing market remains on track for its best year on record, according to a revised forecast prepared by The Canadian Real Estate Association (CREA).
CREA predicts 484,025 properties will be sold through the Multiple Listing Service in 2005 – up 5.0 per cent from a record 461,112 sales in 2004 and its fifth consecutive annual record.
Exceptionally strong sales in the second and third quarters of 2005 will also push MLS home sales to new annual records in British Columbia, Alberta, Manitoba, Ontario, Quebec and New Brunswick. Seasonally adjusted national MLS homes sales hit 126,890 units in the third quarter of 2005 – their highest quarterly level on record and up 3.3 per cent from the 122,860 units sold in the second quarter of 2005.
“Sales momentum picked up during the third quarter, setting a new monthly record for sales activity in August. Transactions are still running exceptionally high, but small interest rate increases are beginning to bring sales activity back to earth in a number of major markets,” said CREA’s Chief Economist Gregory Klump.
“Sales activity is forecast to gradually trend lower as interest rates creep higher next year. Even though transactions through the MLS® are forecast to ease, they are expected to reach their third-highest annual level on record in 2006,” predicted Klump.
“The housing market will become more balanced as additional expected housing price and interest rate increases cause sales activity to edge lower next year. Price gains will be more modest in 2006 as the market becomes more balanced,” he added.
The CREA forecast estimates the annual MLS average home price in Canada will be $256,200 in 2005, up 13.2 per cent from 2004. This is its biggest annual increase since 1989 and its seventh consecutive annual record. The annual MLS average home price will increase by a further 5.0 per cent to $269,000 in 2006.
“Mortgage interest rates are expected to remain within one per cent of current levels in 2006, so many homebuyers will still be able to finance more expensive home purchases,” added Klump."
Good news eh! We think so and here's why. We look forward to seeing your feedback on this too! Our belief after working in many exciting resort destinations, not unlike the Okanagan is that in most instances a somewhat protected real estate economy forms in these environments.
Does that mean that they can't crash.. heavens no. There has been more than one occasion when you could have picked up a Condo at Whistler by taking over the payments! Will that happen again, the answer is surely...NO.
With authors like Harry Dent, a well respected futurist predecting an end to an unprecedented "housing bubble" (after writing a book 6 years ago on the unprecedented and long term boom!!... then again he recently forecast that by spring oil would be $25 per barrel!) the media is picking up on this frenzy and suggesting cautious plans for real estate investments and using a very wide brush to paint "all" sectors of the housing market.
So why are we so confident that the Okanagan valley real estate opportunity is so strong. Because short to medium term demand is very strong and largely unshakeable. Take a wealthy oil services company owner from Red Deer for example, who has made enough money to slow down and live his dream here in the Okanagan. What happens to this persons desire to buy here when interest rates go up a few points? Nothing, because he has already planned for the event.
The rapidly increasing housing values in the Okanagan are luring a higher net worth individual to the Okanagan who is less impacted by external influencers than urban blue collar markets! From an investment perspective, the Okanagan remains an outstanding and well marketed destination to which many families will continue to flock. Talk to hotel owners in Osoyoos and they will tell you of Albertan families who have NEVER missed their annual family vacation in the same hotel, often in the same room EVERY YEAR!!!
Can the unpredictable happen! Yes, we are not sure what it is, but interestingly enough, when the unpredictable does happen, there is no place better to be than the Okanagan. That is why we believe it will KEEP ON TRUCKIN!
CREA predicts 484,025 properties will be sold through the Multiple Listing Service in 2005 – up 5.0 per cent from a record 461,112 sales in 2004 and its fifth consecutive annual record.
Exceptionally strong sales in the second and third quarters of 2005 will also push MLS home sales to new annual records in British Columbia, Alberta, Manitoba, Ontario, Quebec and New Brunswick. Seasonally adjusted national MLS homes sales hit 126,890 units in the third quarter of 2005 – their highest quarterly level on record and up 3.3 per cent from the 122,860 units sold in the second quarter of 2005.
“Sales momentum picked up during the third quarter, setting a new monthly record for sales activity in August. Transactions are still running exceptionally high, but small interest rate increases are beginning to bring sales activity back to earth in a number of major markets,” said CREA’s Chief Economist Gregory Klump.
“Sales activity is forecast to gradually trend lower as interest rates creep higher next year. Even though transactions through the MLS® are forecast to ease, they are expected to reach their third-highest annual level on record in 2006,” predicted Klump.
“The housing market will become more balanced as additional expected housing price and interest rate increases cause sales activity to edge lower next year. Price gains will be more modest in 2006 as the market becomes more balanced,” he added.
The CREA forecast estimates the annual MLS average home price in Canada will be $256,200 in 2005, up 13.2 per cent from 2004. This is its biggest annual increase since 1989 and its seventh consecutive annual record. The annual MLS average home price will increase by a further 5.0 per cent to $269,000 in 2006.
“Mortgage interest rates are expected to remain within one per cent of current levels in 2006, so many homebuyers will still be able to finance more expensive home purchases,” added Klump."
Good news eh! We think so and here's why. We look forward to seeing your feedback on this too! Our belief after working in many exciting resort destinations, not unlike the Okanagan is that in most instances a somewhat protected real estate economy forms in these environments.
Does that mean that they can't crash.. heavens no. There has been more than one occasion when you could have picked up a Condo at Whistler by taking over the payments! Will that happen again, the answer is surely...NO.
With authors like Harry Dent, a well respected futurist predecting an end to an unprecedented "housing bubble" (after writing a book 6 years ago on the unprecedented and long term boom!!... then again he recently forecast that by spring oil would be $25 per barrel!) the media is picking up on this frenzy and suggesting cautious plans for real estate investments and using a very wide brush to paint "all" sectors of the housing market.
So why are we so confident that the Okanagan valley real estate opportunity is so strong. Because short to medium term demand is very strong and largely unshakeable. Take a wealthy oil services company owner from Red Deer for example, who has made enough money to slow down and live his dream here in the Okanagan. What happens to this persons desire to buy here when interest rates go up a few points? Nothing, because he has already planned for the event.
The rapidly increasing housing values in the Okanagan are luring a higher net worth individual to the Okanagan who is less impacted by external influencers than urban blue collar markets! From an investment perspective, the Okanagan remains an outstanding and well marketed destination to which many families will continue to flock. Talk to hotel owners in Osoyoos and they will tell you of Albertan families who have NEVER missed their annual family vacation in the same hotel, often in the same room EVERY YEAR!!!
Can the unpredictable happen! Yes, we are not sure what it is, but interestingly enough, when the unpredictable does happen, there is no place better to be than the Okanagan. That is why we believe it will KEEP ON TRUCKIN!
posted by BCResortHomes.com at 4:35 PM
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