Real Estate Market Update/Commentary March 26 2011

March 26 2011

Industrial Commercial Investment Update:
Feature Property on MLS Main St building was listed on market spring 2010 for $649,900 then reduced to $549,000 did not sell, total days on market unsold was 274.  New listing this  week: $499,000
In the last 6 months, Summerland & Penticton combined have recorded 11 sales this category.  Summerland had 2 of those, the only sale since Sept 2010 was a foreclosure industrial parcel.  There are 66 active listings total, Summerland has 18 of those.  If I could describe a soft market segment, I would say “look for 2 sales in 6 months against a supply of 18 trying to sell”.  Soft.

And, if I could find a “poster boy” for describing “soft underbelly” of a local economy, I would say…”look at Main St, just ask how their Main St is doing?”…

well, since 2007 there have been 3 investments made on Summerland Main St (MLS).

That is less than one investment per YEAR.

Against a backdrop of 3 current listings.  So, absorption rate of 365 days.  But wait, there have been 33 other attempts to sell on Main St that outright FAILED, no buyer.  That is more than ten times the number of fail to actual sales over these same 3 years.  TEN TIMES fail to success.  So, how is Main St Summerland?  Don’t ask.

Lot Update:
Here’s a bit of encouraging news!  Year to Date MLS sales in Penticton, Naramata, Summerland and OK Falls: 12 so far!
And of those sales, 66% have been in Summerland…with NOT ONE SOLD IN OK Falls or Naramata!  So, what’s up with lot purchasers?

Well, foreclosure sales in Summerland are up!  50% of Summerland lot sales were foreclosures.  But the 4 non foreclosure lot sales still displays a consistent trend when compared to 3 lot sales in total for this time last year, and 2 lots sold same period 2009.

Before we get carried away with the possibility of any glimmer of hope here, I must throw just a touch of COLD water on our little party by reminding that we need to look at supply also, as an important aspect in a healthy market.  There are 74 active listings in Summerland ALONE, this category.  So, really, relative to supply, demand remains consistent: demand shows a very, very weak absorption rate.

And, absorption rate is what triggers investment, by the way…so until absorption rates improve, do not expect to see much of any investment in Summerland.  Primarily because NOONE will finance ANYTHING with an absorption rate like this.

There are 9 active listings this category over $1million.  Last time there was a sale over $1million in this category in Summerland, Penticton, Naramata or OK Falls COMBINED was in Nov 2007.

Residential:
Last 30 day period in Summerland saw 11 solds against a backdrop of 319 active listings, for a 29 month supply.  I’m just not going to comment on that particular sad state of demand due to buyer’s ability to purchase {no jobs}  in Summerland.

Have a nice day, and do not expect anything to change until Summerland gets some jobs.  PS to the anti prison, coffee shop yellin’, photoshoppin’, letter writin’, petition drafing kinda folks…PLEASE note that I did NOT say prisongood or prisonbad here…you are welcome to  interpret however you please…after all, Canada IS a free country.

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