A low inventory of properties for sale and an influx of buyers from the Lower Mainland and Alberta are driving up home prices in Salmon Arm.
Marv Beers, owner of Royal LePage Access Real Estate Salmon Arm, said the average sale price for a single-family house has gone from $366,789 in 2014 to $410,607 in the first five months of this year.
“There’s just such a lack of inventory, especially in the $300,000 to $400,000 range, and any good property within that range is being snapped up, especially if it’s in a good location,” Beers said.
According to a release from the Okanagan Mainline Real Estate Board (OMREB), which covers the Okanagan, Shuswap and Revelstoke areas, residential sales are on a record-breaking trend. The release says that across OMREB, sales in May were up 35.5 per cent compared to the same month last year.
“We’ve had a couple properties that have received two offers at a time where certainly people are paying a premium for that,” said Jeff Stacer of Re-Max Realty.
Two competing offers recently resulted in the full-price sale of an $899,000 house that had been on the market off and on for two years, he said.
“We have a situation where I think that sellers are nervous to put their house up on the market, especially if they’re in that really hot price segment.
“If you had a house in that segment and you’re planning to move from one house to another in Salmon Arm, you’d probably want to find your new house before you put your current house on the market,” said Beers when asked about the low number of houses for sale.
Beers said caution to sell on the part of many homeowners is disrupting the normal flow of inventory and driving prices up.
“We’re getting a lot of buyers that are coming out of the Lower Mainland and Fraser Valley. I think what’s happening down there is you’re getting the Vancouver people being pushed out into Surrey, Langley, Abbotsford and even Chilliwack, and then the people in those areas are coming up to the Interior,” Stacer said.
He said the local real-estate market has returned to a similar level as 2007, prior to the 2008 financial crisis. He describes it as active but not red-hot like other areas such as Kelowna.
Beers noted an increase in buyers from the Lower Mainland as well, but added that Albertans are also buying property in the area due to the job situation in Alberta.
He said the demand, coupled with measures from the government, including property transfer tax forgiveness, was evident in the surge in sales of empty lots, potentially leading to an increase in business for homebuilders.
Gary Arsenault, owner of Green Emerald Construction, said there are quite a few houses being built on less expensive Salmon Arm lots.
His company deals primarily in custom-built homes, but Arsenault said new “spec” homes are selling so fast he is considering moving the business in that direction – and with good reason.
The show home for Green Emerald’s new development at the north end of 20th street NE, sold the day after it was put up for sale.