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First-time buyers shake up real estate market doldrums
It may be difficult to get a fix on the local real estate market given the high number of prognosticating, so-called experts.
But from the point of view of one local realtor, there have been improvements, and he has the numbers to show a growing contingent of first-time buyers are the reason why.
On the heels of a new Re/Max report focused on new buyers, realtor Cliff Shillington contended a lower price point and a looming hike in interest rates created a stir among those who were previously frozen out of the market, sparking some much needed market momentum.
“Compared to last year, our inventory is down and condos are moving,” he said, highlighting the fact it’s lower priced homes that are increasingly popular.
Thirty per cent of 418 year-to-date sales, up until February, took place at the under $260,000 price-point, and nearly 80 of those were condominiums.
Cheaper condos and townhouses, said Shillington, are key to the positive momentum in the market, cautioning there are slim pickings in that price point for those who want the white-picket fence pipe dream.
There are just 39 single-family homes currently listed in that price range, and he said most of those can be described as “handyman specials.”
“That’s not a bad thing,” he said, in reference to the fact that single-family homes are out of reach for some.
“Let’s face it, we’re only going to move forward and it’s good to get into the market.”
Those content with condominiums can find 151 one-bedroom units currently listed for sale, typically averaging 800 sq. ft, with an average asking price of $255,000.
Apartment style units can start as low as $200,000 in older areas of the city that are being revitalized.
Other popular areas to get a starter home are Glenrosa, Rutland, and North Glenmore and Central Kelowna.
While affordability is an issue for some, a growing number of first-time purchasers are spending amounts closer to average price, which is typically between $350,000 and $400,000.
Residential average price currently hovers at $390,000. Getting into a home that price, with a five per cent down payment of $19,523, would make the monthly carrying costs $1,740.
An income of $65,239 would be required to take part in the market.
As an aside, changes to recent financing criteria have not created the anticipated run up in activity in most markets.
From a financial standpoint, most rookie home buyers remain quite prudent.
Those making the leap are not doing it lightly, buying within their means.
A growing demand for reasonably-priced product is creating a shift in the country’s housing mix.
That trend is expected to gain traction in coming years, as builders look to create greater options for those seeking to realize homeownership.