'Weak' year for Kamloops housing market

Skyrocketing mortgage interest rates, a lack of affordable housing and wildfires trounced Kamloops' housing market in 2023.

Just-released, year-end figures from the 2,600-member Association of Interior Realtors show that sales and prices managed to inch up last year.

However, 2023's slim gains are compared to 2022, which was also a tough year for real estate in the city following the post-pandemic boom of 2021.

"Overall, 2023 was a bit of a weak year for real estate sales with three rate hikes, devastating wildfires and a lack of affordable housing and other outside factors all likely contributing to a general slowdown in transactions," said association president Chelsea Mann, who is also a realtor with Century 21 Realty Executives in Kamloops.

To put this in numbers, only 75 residential properties of all kinds (single-family homes, townhouses and condominiums) sold in December 2023, a step up from the 63 sales of December 2022.

In 2021, as the housing market escalated in a post-pandemic frenzy, sales and price gains were brisk in Kamloops.

At the end of 2023, the benchmark selling price of a typical single-family home in Kamloops was $650,000, up from $625,700 at the end of 2022.

The benchmark peaked in June 2022 at $820,990 just before runaway inflation drove mortgage interest rates up resulting in sales and prices tanking.

Comparing 2023's year-end $650,000 to the record-high of $820,990 results in a difference of $170,999.

That kind of loss is distressing to homeowners who've seen equity in their property erode big-time.

On the other side of the coin, for potential homebuyers, prices are down and presumably more affordable.

Not really so.

Jacked-up mortgage interest rates have stymied people's borrowing and buying power, actually making home ownership more unattainable.

The benchmark selling price of a typical townhouse in Kamloops at the end of 2023 was $521,200, which is actually up a bit from 2022's year-end of $512,400, but it's still $48,200 off the record-high set in spring 2022 of $569,400.

For a typical condo, the benchmark selling price at the end of 2023 was $375,500, up from $360,400 at the end of 2022, but a $27,823 slide from the record-high $403,323 in June 2022.

"Buyers and sellers who have been waiting on the sidelines for potential interest rate relief may likely still be optimistically holding off pursuing their real estate endeavours to see if the new year will finally provide more favourable mortgage rates," said Mann.

That mortgage interest rate relief likely won't be seen until at least the middle part of this year.

When Montreal-based Pierre Cleroux, the chief economist for the Business Development Bank of Canada, was in the Southern Interior a couple of months ago he predicted interest rates would start slowly coming down in mid-2024 as inflation is tamped down.

However, he forecasted economic growth to continue slow at 0.4% through the year before interest rates can go down further in 2025 as inflation shrinks to its target of 2% and the economy ticks up to 2.6% growth.