Last week was an interesting one for me. I was in 3 different multiple offer situations in various price points and areas in the city. The pressure was on because all of my clients absolutely loved each of these homes. We were able to secure each of these clients their dream home. It matters who you work with!
KEY TO SUCCESS
Only agent presenting in person, clients did pre-inspection, had no conditions.
✅ Presented in Person
✅ Pre-inspection
✅ No Conditions
KEY TO SUCCESS
Clients did pre-inspection and provided approval letter of financing to sellers.
✅ Pre-inspection
✅ Financing Approval Letter
KEY TO SUCCESS
Understanding the market by recognizing the house was underpriced and a strong financial offer was warranted. Sometimes paying over asking doesn’t mean paying over market value.
✅ Understanding Market Value
The real estate market in Ottawa is a very competitive place to purchase real estate. This year multiple offers are commonplace in almost every neighbourhood. Here are a few tips if you ever find yourself in this situation.
1. Representation
I think getting the right Realtor® working for you will be the most important step. Someone who can be a guide through this complicated process. A thorough review of the market is also very important. Often times multiple bids are created because a house is under-valued as compared with other listings that have sold in the area. This means that even though a buyer might pay more than list price for a home they are not necessarily paying over market value.
2. Presentation of Offers
For most people, there is a human element in selling their house. I like to present my offers directly to the seller in multiple bids. Basically, tell them how wonderful my clients are-which is true! I have had sellers more than once choose my clients’ offer that was less money. One time over $3000 less!
3. Price
Of course for many people, price is the most important factor. Finding a price that is going to be competitive and also not overpaying is a delicate undertaking. This is where the buyer’s discussions with their agent can really help figure out just how much they want the house. Generally, it is best to put your best offer forward in these situations because you usually don’t get a second chance.
4. Conditions
These will always be a factor for sellers. In this market, many buyers are getting their home inspection done prior to the offer date. Having this condition out of the agreement can make your offer more appealing. Also, if you can get an approval from your bank before the offer date and have an unconditional offer this will set you up in a position to succeed. The challenge with this option is that if you get the inspection done and lose the multiple offers you are out about $500.
The Ottawa real estate market continues to hit new highs. Multiple offers across the city continue to put upward pressure on prices. There is no secret that Ottawa has a supply issue. Housing inventory remains at record low levels. Sellers are hesitant to put their houses for sale because there is not much to purchase on the other side. It has created a bit of a catch 22. This low inventory appears to be a trend likely to continue for the foreseeable future.
The BIG QUESTION I am getting lately is will prices continue to go up or is there a bubble near? I don’t have a crystal ball but I do talk about this in our monthly report. You can find it below.
One of the best marketing campaigns I can remember growing up was Head and Shoulders shampoo. Their slogan was “because you never get a second chance to make a first impression”. It is so true in not having dandruff on your shirt and it can also be applied to real estate. Stay with me here. When home buyers walk into your house you want to be feeling good about what they see and excited about what is to come! First impressions are crucial!!
Side note: I looked up that campaign and it was from the ’80s (ageing myself a bit). I still use H&S today because I am petrified of dandruff and making the wrong first impression.
If you are a home buyer what room would make a good impression to you:
Well, I agree with your choice. We suggested the homeowner bring in some rental furniture to outfit this room properly. We then made the room come to life and accessorized it.
Of course, once you commit to the staging you can’t just stop at one room. It all has to come together. In this case, we had a pretty solid plan that the homeowners bought into. We ended up bringing some of our own furniture we use for lots of stagings, to bring it all together.
You will notice the kids room. We felt the demographic buying would be younger families so we showcased as such. That is Aiden’s (my son) old bed and some of his toys/books. 🤫 Don’t tell him! We also brought a desk and chair in for the loft among many other changes.
Why go through all this work?
This is really the big question, isn’t it? Is it really worth it to stage? My answer is, absolutely. Having a fresh, modern, clean look is the key. We want people to feel excited about the house and the possibility of owning it. I bet there are people who would not even offer on the house as it sat before. They might not even realize why. Hard to prove this theory but we have taken over many non-staged homes that could not sell. We keep the prices the same and then like magic! they sell for top dollar. That is why I also invested over $2500 to stage my own place when I sold. Anyways, I am ranting a bit here but it is what I believe with conviction.
Interesting numbers released by the Ottawa real estate market this week. The number of sales are down over 12% in the residential class segment. At first glance, one would think it is a slow market but the lack of sales is only because of the extremely tight supply. There is just not much available to buy right now. This is putting upward pressure on prices. As an example, I have a listing that sold in 2017 for $475k. This year it sold for close to $560k. No real work was done on it. It is incredible to see some of these price gains. Much of this appreciation is in the entry-level segment of the market. It is also very much neighbourhood dependent.
I have been saying in my annual reports for years that Ottawa is undervalued. It seems that others are starting to catch on and maybe we are having a correction of prices. They are just going up rather than down. Our population growth was pegged at 8.8% this year. That coupled with the really good local economy and still relative affordability in the housing market and you have this perfect storm of factors. My hope is that we see a higher than average number of homes for sale this Spring. This would help ease the pressure facing buyers and prices in this market! If you have any questions on your neighbourhood feel free to get in touch.
It was another strong month for real estate sales in Ottawa. Members of the board sold 1,005 residential properties, that is up from 978 last year. What is more impressive is that this was done while the inventory is down. The low inventory has left buyers competing over fewer homes. The sales numbers would have been much higher if there was more available for sale. This has spiked the average home price to over 8.6% when compared to February of 2018. The lack of inventory tells me that this trend will continue likely throughout the year. We could continue to see upward pressure on prices. To put it in perspective we have 40% less available homes when compared to February of 2017 with more demand.
The average price of a residential-class property in Ottawa last month was $466,540. The condo market is also lacking inventory holds down an average price of $288,000, this is up 5.6% compared with February of last year.
In the big picture, Ottawa remains the most stable real estate market in North America. Historically we have always posted gains year to year and have weathered economic storms better than any other housing market. This year we are starting to see weakness in other market centres while Ottawa continues to thrive. This is because our housing is still relatively affordable considering our high household income averages. How long I will be about to tout that is uncertain! Everything points towards an extremely active Spring market.
As always I encourage everyone to think about investment properties. It has been one of the most consistent ways to build wealth. We are fortunate to have such a great opportunity in our backyard. Prices are still affordable but for how long we shall see.
If you are curious to know whats happening in your neighbourhood please feel free to get in touch.
January is usually one of the slowest months of the year in real estate and although we had record low temperatures and lots of snowfall… the Ottawa market was hot. In January the residential and condo property classes there were 820 homes sold. That is a large jump to a 15.8% increase in units sold over January 2018. This is the highest increase Ottawa has experienced in decades. This could be a sign of things to come for our 2019 housing market.
The average sale price for homes in Ottawa continues to rise over last year’s numbers. In January we saw a 1.5% increase in the residential class property and in the condo property class we saw an increase of 7.7% over January 2018.
The $300,000 to $449,000 range remains the most active price point in the residential market contributing to 42.5% of homes sold. The $175,000 to $274,999 price range was the most active price point for the condos market in Ottawa, accounting for almost 54.1% of the units sold. If you are interested in finding out the market trends in your neighbourhood, please feel free to get in touch.
Our team has just invested in a moving concierge program that will be a game changer for our clients. This new platform will assist our clients with everything from changing addresses, transferring home services, updating identification, and getting helpful advice. This can include anything from setting up short term Airbnb accommodations to organizing moving company quotes. Each client will have a dedicated concierge agent. We are completely committed to the client experience. We hope this new service will bring value to our clients and make the transition into the new home as easy as possible.
Many of our Ottawa home sellers are nervous about home staging. Many do not understand the process. I thought I would clarify what it looks like with our team. We take a hands on approach and understand that every house has its own unique challenges. Here is an example of a staging consultation where the home was in good shape but making slight adjustments made it shine. A little can go along way in preparing an Ottawa home for market and our team knows what works. This home ended up selling for a record price in multiple offers.
ROOM BY ROOM ANALYSIS
Our staging team walks through each room with our clients and suggestions are made on everything from furniture placement, what to remove, what to bring in, paint colours, and minor repairs. Everything is from the perspective of how we can maximize the price and showing condition.
Based on our client’s circumstances we make a priority list to ensure the best possible results. Photos will be taken of each room for note-taking. Our clients do not have to take notes. Once the consultation is complete we email a detailed personalized report (usually within 24 hours) summarizing everything discussed.
Each page of the report discusses an individual room. It has a photo of the room along with a list of everything to remove, where to place furniture, exactly what to edit, and what our team will bring in if necessary. The checklist is easy to follow. We want to make this experience as straightforward as possible for our clients.
Here is an example report:
DINING ROOM
This room looks great. Please keep the bowl and the balls. You said you also have some red ones that we will experiment with as well.
We will bring a runner to break up all the wood
KITCHEN
We can tweak the last-minute things in the kitchen on Sunday but just leave the red appliances and the coffee maker. Remove everything else.
We can bring some greenery.
Please keep your little blue and white pot with the greenery in it.
Please leave the stools.
LIVING ROOM
Please remove any signs of pets for photos and showings
If possible, use the faux fur cushions just for the photos and then you can use your Christmas ones.
Chris brought this area rug that will help warm up the space once everything else is added
We have a tray and accessories to put on the coffee table
Please remove everything from the end table and put the black lamp from the master bedroom on it
Keep the little tree on the end table
We will also bring some tan cushions that will tie in the area rug
Please remove the mat under the red cabinet. You might want to put felt pads on the legs to protect the floor.
We will tweak what is on top, but it looks good. Chris brought his big plant for photos. Afterwards, it can go in the basement where the dog bed is now. You can put your Christmas tree up by the window if you want after photos.
LOFT
Please leave the furniture as we placed it today (before photo taken before we moved it). Your artwork will go to the basement
Keep the lamp on the desk. I will bring some greenery for the desk.
Chris will bring in desk and grey chair
Place one of your navy cushions on the chair.
Keep the table, floor lamp and some books beside the chair.
MASTER BEDROOM
This lamp should go beside the sectional in the living room.
We will bring some lamps and cushions.
Please remove the photo artwork but leave the large floral one.
We will bring cushions for colour
MASTER BATHROOM
We will bring accessories and artwork for this bathroom to complement the master bedroom.
We always suggest buying rubber bins for the shampoos, toothbrushes etc. That way items can be removed and put in a closet. You don’t want personal hygiene products showing for photos or showings.
MAIN BATHROOM
We will bring artwork, towels (for show only) and accessories for the vanity.
Please keep your shower curtain.
Remove everything else off the vanity.
LAUNDRY ROOM
We will bring artwork and accessories for this room.
Please just remove anything on or in the machines for photos and showings.
BEDROOM TWO
We want this room to appeal to an older child. I will bring artwork, cushions and accessories for this room.
Please put your paddle from the dining room in the far corner by the window. It will fit in with the theme of the room.
Please keep all the lanterns that you have around the house.
Please remove the artwork.
Keep the lamp.
BEDROOM THREE
Please remove everything from this room except the cube storage unit.
Chris will bring in bed and some staging acesories with Cars theme.
BASEMENT
This room looks great. Ideally, I would love to bring the artwork closer together if the holes don’t show.
Turn your movies around the shelves so you can’t read the labels.
Remove everything from the top of the higher unit.
Tidy the desk as much as possible.
Remove the dog beds, the heater, the 4 pictures and the lamp. We might put the floor lamp from the loft here instead.
Clear off the top of the bookcase and all the little pieces on the shelves except the books.
If you are curious about what we can do for you please feel free to get in touch.
As an Ottawa realtor, I’m often asked by my clients that are both selling and buying a home, if they will have to pay CMHC again. It is an important real estate question and we want our clients to have all the answers before proceeding. What is CMHC?
Canada Mortgage and Housing Corporation is insurance which protects the lenders and thereby allows buyers to put a lower downpayment on a purchase and in most cases allows more competitive rates.
Now knowing what CMHC is, we know it is applicable depending on the size of the downpayment and whether or not the lender would like the mortgage insured.
Here are some scenarios to help you better understand if CMHC would be applicable to you.
Staying With Your Current Lender
Conventional Uninsured Mortgage – If you are staying with your current lender and your new purchase will have a 20% downpayment or higher, you will most likely not have to pay CMHC unless your current lender requires it as part of their guidelines to be a Conventional Insurable Mortgage. High Ratio Insured Mortgage – If you are staying with your current lender and your new Ottawa home purchase will have less than a 20% downpayment, you will most likely have to pay the top-up premium on the new amount. For example: Your home sells for $400,000. Your Mortgage amount owing is $350,000. You use the equity from the sale of your home for your new purchase of $500,000. This would approximately only be a 10% downpayment and would require you to pay CMHC and the top-up difference. The difference would be $500,000 (purchase price)-$50,000 (downpayment)-$350,000 (previous mortgage amount) = $100,000 (additional new mortgage amount). As of January 15, 2019, with a 90% L-T-V (10% downpayment) the premium on a top-up is 6.25%. So your top-up CMHC premium would be $100,000 x 6.25% = $6,250 (as a new premium would be 3.10% which would be $450,000 x 3.10% = $13,950) Also please note: your mortgage must stay at the existing amortization remaining on your current mortgage for the top up premium to be used in most cases.
Changing Lenders
Conventional Uninsured Mortgage – If you are changing your lender and your new purchase will have a 20% downpayment or higher, you will most likely not have to pay CMHC unless your new lender requires it as part of their guidelines to be a Conventional Insurable Mortgage.
High Ratio Insured Mortgage – If you are changing lenders and your new purchase will have less than a 20% downpayment, you will most likely have to pay the top-up premium on the new amount or full CMHC on the total loan amount. Whichever is less. This is where having a mortgage broker’s guidance can help answer whether it is better to pay full CMHC or the top-up premium.
When I set out last year to undertake this exercise I was optimistic 2018 was going to be a good year. I could not predict just how hot our market was going to be. Early in 2018, there was a significant shortage of housing inventory across the city. This is usual in places like Westboro and the core of the city. This past year that shortage spread to the suburbs-especially in the west end of the city. The lack of inventory was apparent in almost every class of property and price range. The most active being between 300-450k. In many cases, our clients were offering against as many as a dozen or more other buyers. This is common practice in cities like Toronto but a newer phenomenon here in Ottawa. The spring brought lots of new inventory and this helped stabilize things. It was still a seller’s market but as the year went on it became less competitive for properties. Instead of 12 offers on many of the listings, we started seeing 2-4 offers depending on price range. Let’s have a look at the numbers driving our market.
KEY INDICATORS
AFFORDABILITY
Ottawa households have one of the highest household income averages in Canada. If you see the graph on the following page you can see that prices are still relatively affordable for Ottawa buyers. This graph looks very different for buyers in cities like Vancouver and Toronto.
IMMIGRATION
If you Google best places to migrate to in Canada, Ottawa seems to be the number one choice. I am seeing many more immigrants choose Ottawa as their final destination. Toronto and Montreal are of course popular but when someone researches where to live in Canada, Ottawa comes out close to number one in almost all categories.
The common misconception out there is that these immigrants do not have the funds to purchase real estate. That is not always the case. In many instances, it is their credit or lack thereof that may be holding them back. In any case, these immigrants are coming at a record pace and will likely be purchasing real estate in the future.
MORTGAGE RULES AND INTEREST RATES
Banks have been forced to stress test buyers at a full 2 percentage points higher than the interest rate of their mortgage. This can impact purchasing power by almost 20%. I see the need for this but as house prices rise in major market centres there has been plenty of pushback. Interest rates have been slowly rising and this has put pressure on affordability for some buyers. If this trend continues it will have an impact on the market for sure. With the economy being more sluggish, the need for further increases may be curbed.
LOCAL ECONOMY
Ottawa has always been an underrated city in my view. We have a strong local economy with one of the highest median household income averages in Canada. Our unemployment rate is at historically low levels. It is a prototypical government town that has a growing technology sector and lots of solid, high paying professional jobs. It is only a matter of time before our prices surge and we become a global player in real estate. For a world-class capital city our prices still might be a bargain. Time will tell!
ELECTION YEAR
Housing affordability has climbed up to be one of the top issues for millennials. This makes it an election issue. A recent poll found that 64% of millennial voters want the government to do something about climbing prices. We will see the politicians respective platforms later this year. My prediction is that some of these platforms will have policies that will make it easier or more affordable for buyers to purchase. It could mean the return of 30-year amortizations. The stress tests might be eased or there could be a new policy altogether. Something to watch for sure.
VACANCY RATE
This year renters are facing a 1.3% vacancy rate in Ottawa. This is an all-time low. It has made finding a rental very competitive. Often times renters are actually in multiple offers for rental properties. There is a similar pattern in other major market centres across Canada. As house prices increase it is forcing some people to rent rather than buy. Might be a great time to purchase a property to rent out.
GROWTH AND INFRASTRUCTURE
Ottawa is growing and maturing into a world-class city. We should all be grateful to live in a city with such a high quality of life. By March we will have light rail going right downtown that will make life easier for commuters. This will just be the start of a much broader transportation plan. We have a super hospital that will be coming online in the years to come. Lebreton will eventually get the green light for redevelopment. Lots to be excited about. These will help fuel our economic growth in the years ahead.
2019 FORECAST
I believe it will be another strong resale year for Ottawa homebuyers and sellers in 2019. There is still pent-up demand and lots of buyers looking to purchase. This was reinforced just before Christmas as our team was involved in 2 multiple bid situations in the Fairwinds area. The targets were modern semi-detached townhomes, one that we sold for a record price with 3 offers. This is not the kind of activity you would typically see just before Christmas. It is indicative of the market in the entry level price points. The $350k-450k market will continue to be red hot this year. I have spoken with a few builders who had record years. Next year many homebuyers will be on the move to their newly built homes. This will hopefully create some much-needed inventory in 2019.
I predict we will have another seller’s market that will slowly slide to a balanced market by the time 2019 is complete. Barring an international crisis, it will be another great year for the Ottawa Real Estate market.
If you are curious about your homes worth please fill in this form for a no-obligation market assessment.
Our team has just invested in a moving concierge program that will be a game changer for our clients. This new platform will assist our clients with everything from changing addresses, transferring home services, updating identification, and getting helpful advice. This can include anything from setting up short term Airbnb accommodations to organizing moving company quotes. Each client will have a dedicated concierge agent. We are completely committed to the client experience. We hope this new service will bring value to our clients and make the transition into the new home as easy as possible.
