Resilience: 2021

Resilience: 2021

We find ourselves in a rapidly changing world & real estate continues to enjoy its evergreen status 

Hoping everyone had some down time over the last number of weeks, was able to go skiing, snowboarding, sledding or whatever your winter pleasure may be! Looks like we are set for a great season at the hills. I want to share what’s transpired over the last year & where things are at with real estate in the south Okanagan, let’s take a look…

A dramatic year, in the review mirror 

Being in real estate sales in the South Okanagan was quite the exciting experience, a whipsaw year like never before. We were dead slow till June and then, with the heat of a thousand suns, we launched into frantic over-activity.

South Okanagan – Year to date Avg. sale price for December 2020

Single family homes   $644,201    +19.4%

Condos                              $329,329    +10.8%

Townhomes                    $407,039   +10.0%

Farm/Acreage              $1,295,726   +20.4%

Average days on Market       82     -4

# of sales                                2,719       +34.4% from prior year*

Listing inventory                1,103       -28.3%

*What is interesting to note is that the increase in the number of sales was dramatic year over year, but was only a rather normal figure, when taking the 6 year average of 2,524, up only 7.7%

What made this already unusual year even more interesting, was listing inventory so persistently low, down -28% from the prior year. This meant a real squeeze was on the Buyers and practically every new listing that came up had to be taken with intense seriousness as the fear of missing out kicked in. I have never, not even in the years leading to the 2008 crescendo, witnessed this level of FOMO. Really extraordinary.

Numerous regions throughout Canada produced headline worthy – phenomenal activity this year with Vancouver and Toronto’s single family markets leading the way. The numbers we enjoyed were also outstanding and represented the incredible allure of the Okanagan Valley. We can consider our activity a welcome maturation of the Okanagan’s real estate market and I do see this trend continuing.

More and more, people are working remotely (by necessity during the pandemic) but also reflective of a common desire for fresh air & flexibility. This allows people once tied to major centres of employment to branch out and to live life on their own terms. Additionally, large differentials between home prices in the Vancouver region and the Okanagan, hasn’t hurt the calculus… Major beneficiary – Okanagan Valley.

[Giants Head Mountain Park, views to the North] 

No matter what’s going on in the world, we remain eternally grateful to call this place home.

Complexity, Pain & Ease: The set up, it’s a strange one 

The effects of Government intervention & monetary policy on Okanagan real estate today

In truth, it was probably one of the most difficult years of life for many individuals. The unemployment rate in Canada reached 13.7% in May, a figure that notably exceeded 1983’s 12% and 1993’s 11.4%.  The pain was felt most acutely by those not adequately participating in real estate or stock markets. Despite all political rhetoric to the opposite, the wealth gap accelerated like mad after the springtime stimulus. During this period, the NASDAQ rocketed 50% by July, from its March lows. Extraordinary.

During this same period, the real economy, or main street was irreversibly damaged at the hands of government emergency policy. Catastrophic responses to COVID-19, whether well considered & justified or otherwise (we may never know) as the science has been politicized into oblivion. A Stats Canada survey which finished in late October found that “30% of businesses did not know how long they could continue to operate at their current level of revenue and expenditures before considering further staffing actions, closure or bankruptcy.” With more than 56% of small business owners utilizing government programs in order to sustain operations. The road ahead remains precarious.

Canada is currently ranked 8th out of 196 sovereign states in Private Debt-to-GDP, which sits at 263%. Debt spending, with the expectation of future return is not just a game being played by a shrewd & limited few, it feels like the only game left to play in our inflationary world.  An historically risky business. Unfortunately, a lot of this debt has been spent surviving the last year, not innovating and you can expect diminishing returns, eventually…

The magnitude of ongoing events is reflected in language used by the political elite, looking for ‘opportunity,’ as our Prime Minister Trudeau stated – it’s time for a Great Reset. The ‘Build Back Better’ slogan once used by Bill Clinton with respect to Haiti, is now the world wide mantra. This is a crisis with much opportunity for some, but regressive dependence for most.

Inflation is running hot, much hotter than what is commonly touted. Despite dramatic changes we are always hovering near the magical 2%, curious. Estimates produced by some economists are well beyond that official figure and are more in the range of 5-7%, utilizing methods last seen in 1981 which were more reflective of ‘what does the average person have to buy in order to maintain a given quality of life & what is that costing them?’ The government of Canada has moved these goal posts continually, having changed how they calculate the inflation rate more than 20 times since 1978. Utilizing the prior calculation method would comfortably explain our real estate price ‘gains’ of late in the absence of most other fundamental forces.

Immigration, often mentioned as an upward driver of demand for real estate, decreased by -9.3% year over year.

This leaves us the topic of interest rates, which are at all time lows with the bank rate sitting at .25%. The last time we saw this level was in response to the Great Financial Crisis in the Fall of 2008. I’ve had clients recently obtaining 4 year terms at 1.49% and many average applications in the 1.8-1.9% range for the 5 year. This is incredibly cheap money and allows the inherent price expansions.


As long as the Bank of Canada maintains their accommodative stance, we are likely to see the benefits accruing to the real estate market. With statements like this from BoC Governor, Tiff Macklem, “Interest rates are very low and they are going to be there for a long time,” Macklem said. “Canadians and Canadian businesses are facing an unusual amount of uncertainty, so we have been unusually clear about the future path for interest rates.” Some have inferred this meaning no increases for the next three years. We shall see.

Whatever the future holds I think this epoch represents an immense amount of opportunity and equally so, risk. Yin and Yang. You should participate, but equally so, you must prepare for unexpected change. There is certainly more to come.

With that, I hope everyone remains healthy and happy, there is so much to be thankful for. Please reach out at any time for my real estate sales services, if you have any questions, or thoughts you’d like to discuss, I am always available. We absolutely need more listings!



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