How the market behaves
How to read a real estate market: supply, demand, interest rates and seasonality.
This page explains how to read a real estate market in general. It deliberately gives no prices or statistics, because they change often. Conditions change, so check current figures with a licensed local realtor and the local real estate board.
Supply and demand
Prices and speed of sales respond to how many homes are for sale (supply) and how many people want to buy (demand). When there are many buyers and few homes, sellers tend to have more leverage. When there are many homes and fewer buyers, buyers tend to have more.
Interest rates
Mortgage rates affect what people can afford to borrow. When borrowing costs change, many buyers adjust their budgets, which can change demand. Rates move over time, so confirm current mortgage terms with a lender or mortgage broker.
Seasonality
Many markets have busier and quieter times of year. Weather, school calendars and holidays can all play a part. A local realtor can tell you how seasonality shows up in Kelowna.
Terms worth knowing
- Inventory
- The homes currently available for sale.
- Days on market
- How long homes take to sell once listed. Shorter generally points to stronger demand, longer to weaker, but it varies by type of home and area.
- Months of supply
- A way to compare inventory with the pace of sales.
Types of homes
| Type | What it usually means |
|---|---|
| Condo | A unit in a larger building. You own the unit and share ownership of common areas, and usually pay monthly strata fees. |
| Townhouse | A home attached to its neighbours, often with its own entrance and sometimes shared strata arrangements. |
| House | A detached home, usually with its own yard and no shared walls. |
Questions to ask a realtor
- What does supply and demand look like right now for the type of home I want?
- How long are comparable homes taking to sell?
- How do recent sale prices of similar homes compare with asking prices?
- How does the time of year affect this market?
- What are the monthly costs besides the mortgage, such as strata fees and property taxes?
- What should I look for in an inspection and in strata documents?
- Which neighbourhoods fit my needs, and what are their trade-offs?
- What are the steps and timelines from offer to possession?