From the blog...
ANNUAL REAL ESTATE REPORT: OTTAWA 2022 IN REVIEW
OTTAWA REAL ESTATE REPORT
Ottawa 2022 Real Estate Market Report Review
This past year was one that I will not soon forget! In the beginning of January I remember one of our team listings selling with 20 plus offers on it for an absolutely surprisingly high price. The ensuing few months brought more of the same. A frenzy like I have never seen in our local market before and may not see again. Short supply and insatiable demand put immense upward pressure on prices. Buyers were desperate to get in on this rising market that was also fueled by historically low interest rates and tight supply. It was the perfect storm of economic conditions that led to this unprecedented market. However, the dark clouds were circling by late Spring. Inflation was starting to get out of control and the Bank of Canada needed to act with interest rate hikes to start reining it in. Every rate hike chipped away at our hot market until finally their mission was accomplished by early Fall and prices were on a steady decline with consumer confidence and affordability becoming major issues. There is so much to consider when thinking about where the market will go from here. To understand it we must look at the key indicators that will all have a role to play in where our market goes from here.
Average sales prices are for 2022 based on MLS sales.
Combined is for all property classes. Arrows are gains/losses from 2021.
OTTAWA REAL ESTATE REPORT
I think the Ottawa real estate market will have the opposite trajectory of 2022. Where the market was hot early in 2022 I think the market will get off to a sluggish start to the year. By Spring the market will be much more active. Lots of buyers who put the brakes on last year will see the market stabilize and be more confident to buy. By the Fall I could see price increases and more activity in the market. Much will depend on interest rates and inflation. One thing is for sure. It will be an interesting year in our local housing market.
This is where I get my crystal ball out and try to figure out where our local market goes from here. I believe that Canadian home prices will decline in the next 12 months a further 4-6% over 2022. However, I think Ottawa will weather the storm and actually see a slight increase in prices in 2023. Below you will see a few points to consider on our market and economy that will play a role in where we go from here.
One of the major key indicators is population. Canada’s pace of population growth remains the highest in the G7. Numbers from the most recent census in the Spring of 2021 has shown that to remain true, with Ontario, 5.8% outpacing the national average of 5.2%. Immigration is remaining the number one factor driving population growth. As you will see from the chart below, housing inventory in Ottawa is still on the decline. This again puts upward pressure on pricing, which has dropped from its peak in 2022 but is still on the increase overall.
Historic Ottawa Freehold & Condo Inventory Since 2004
Supply is still a major issue in Ottawa. Many new construction projects were halted due to lower demand, high material costs, declining prices, and labor shortages. With less available on the new construction side of the market, more buyers will be looking at the resale market. Ottawa is a sought after and growing city. Long term housing supply is still an issue here that was talked about quite a bit in the early part of 2022. At some point we will get back to bidding wars and an active market again. Much will depend on this critical key indicator.
||Bank of Canada Interest Rate and Inflation
This will be the most important factor in where our market goes. I can make all the predictions I want but if the Bank of Canada raises interest rates more than 50 basis points we will see an immediate decrease in prices in Ottawa. Personally I don’t see that happening. If anything I could see a .25% increase in the short term and then potentially rate decreases by late 2023.
Based on OREB RES & CON MLS Sales | 2023 Prediction
If you are curious about your home’s worth please fill in this form for a no-obligation market assessment.
Ottawa Real Estate Board Trend Analysis – Residential Property Class
WE GO ABOVE AND BEYOND FOR OUR CLIENTS
We are so pleased that we were able to host more events this year! We kicked it off with our private showing of the movie Lightyear! It was great to have a packed house to watch a movie in a theatre again! My kiddos are already researching a good title for our next movie morning. We also had the opportunity to catch up with many of our clients at our 7th Annual Santa Party. This is our most anticipated client event of the year. It was so great to host everyone. We are already thinking about what we can do to make it even better next year. There is talk of the Grinch making a visit! We also continued our new annual tradition with our 3rd Annual Stittsville Food Bank Fundraiser, we partnered again with Maverick’s Donuts. We raised $2,000 again this year! Our mission is to create a raving fan service experience for every client and bring value long after our clients have bought or sold real estate. We are always looking for new ways to do this. We are excited about what we can do for you in 2023. If you have any real estate needs or know of anyone looking please keep our team in mind.