There are currently 760 condos for sale in the Kelowna area, and nearly 35% have already reduced their asking prices. The average time on market for those listings is around 90 days. Yet other condos, sometimes in the same buildings, are still selling. Here are the five reasons I see for why some find buyers while others sit.
Of the 760 listings, 276 have been on the market for more than 90 days, which is over a third of active inventory. If you're a buyer shopping for a two-bedroom around $500,000, you'll likely have several options, even within one building. When layouts, finishes and views are similar, price becomes the easiest way to compare. A better view, an extra parking stall or a better floor plan can justify a higher price, but without those, sellers struggle to stand out.
Many sellers still anchor to what their condo, or a similar one, sold for a few years or even a few months ago. If you bought at the peak, you're not getting that money back. Sellers need to look at both what they're competing against and what has recently sold. For example, a seller might start at $600,000, drop to $575,000, then $550,000, while comparable units just sold for $525,000. Even after those reductions, they're still asking too much.
The longer a condo sits, the more buyers wonder what's wrong with the unit, the building or the strata.
Buyers look at more than the mortgage: property tax, insurance and strata fees all count. Take two condos listed at $500,000, one with strata fees of $350 a month and the other around $650. That's an extra $300 a month, or $3,600 a year. Higher fees don't automatically make a worse purchase, since it depends on what's included, but when two units are otherwise similar, the difference matters.
If you can wait out the market, that isn't necessarily a bad idea. Otherwise you may need to reduce your price, and I've recently seen sellers offering a year of strata fees, up to about $10,000, to get a deal done.
I looked at Kelowna condo sales over the past 90 days. Owner-occupied condos averaged about 99 cumulative days on market, vacant condos about 118 days (including some brand new units), and tenant-occupied condos almost 170 days, roughly 70 days longer than owner-occupied.
In BC, selling a property doesn't automatically end a tenancy, and there are specific rules around when a buyer can take possession for personal use. Showings can be harder to schedule, and sellers have less control over how the unit is presented. Tenant-occupied units also tend to sell for less. With plenty of other condos available, buyers simply move on to the next one.
Sometimes a condo is competitively priced and still doesn't sell, because of the building. Major repairs coming up, a special assessment being discussed, or an inadequate contingency reserve fund can scare buyers off once they review the strata documents. A beautifully renovated condo with a great view can drop from $500,000 to $475,000 and still get passed over because of concerns about future costs.
Sellers need to understand what they're competing against today, not what similar condos sold for in 2021 or 2022. Buyers have a ton of options and can be picky and patient. But don't assume a condo is a great deal just because it has dropped $100,000 to $150,000. Dig into why it hasn't sold first.
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