Typical house in Kelowna now worth a record high $880K

Another month, another record high for house prices in Kelowna.

The latest benchmarks are $880,000 for a single-family home, $560,900 for a townhouse and $438,400 for a condominium.

All figures come from the April report of the Association of Interior Realtors, which tracked a total of 774 sales in April, up a mind blowing 294% from the 197 sales in April 2020.

To be fair, April 2020 was the start of the pandemic and house sales plummeted quickly.

But since then, sales have accelerated at an astounding rate.

Amid uncertainty, house prices stalled when COVID hit.

But that didn't last long.

In fact, home prices have been on a tear with the $880,000 for a single-family house in April representing a 31% hike over last year, the $560,900 for a townhouse an 18% jump and the $438,400 for a condo a 14% increase.

The Association of Interior Realtors, which was formed Jan. 1 through an amalgamation of the Okanagan Mainline and South Okanagan real estate boards, has moved to a benchmark system, rather than average selling price or median price, to track prices in the region.

Benchmark is considered to be a better representation because it sets a value on a house, townhouse or condo with typical attributes in the city.

Average price is now considered to be misleading because a few atypical sales of multi-million dollar homes can skew the average higher.

For example, the average selling prices of a single-family home in Kelowna is now headed toward $1 million.

A number of factors are at play here.

Mortgage interest rates are rock bottom, giving people the confidence to take on purchase if they have a good-paying job or income from investments.

Plus, the pandemic forced introspection on many with some of them deciding they needed a bigger and better place, fueling demand for homes and driving up prices.

As well, that same introspection led some people in big cities like Vancouver, Calgary, Edmonton and Toronto to move to smaller, lifestyle cities like Kelowna for the lifestyle, especially if they are allowed to work from home because of COVID.

All this means homes for sale are being snapped up quickly, often after a bidding with the ultimate buyer paying over the list price.

This has also led to a shortage of home on the market.

"Currently supply is still not catching up to demand. We are in a supply drought when it comes to listings," said Kim Heizmann, president of the 1,600-member Association of Interior Realtors.

"Despite the supply drought, the market remains strong and is starting to rationalize. With vaccine rollouts underway, once more and more people get vaccinated and we get some mobility and comfort back, hopefully we will see more homes come on market."