ANNUAL REAL ESTATE REPORT: STITTSVILLE 2017

I am pleased to provide you with my 2017 real estate market review for the Stittsville area.

Over the course of 2017, 557 homes sold in Stittsville compared to 472 homes in 2016. That is an increase of 18% year over year. Of the homes sold, 385 were detached homes and 172 were row and semi-detached styles, 18.1% and 17.8% increase respectively.[1]

The average sale price of homes sold in Stittsville increased by 7.8% in 2017 over 2016. The average sale price went from $423,364 in 2016 to $456,273 in 2017.  Breaking down sales by detached and row styles show that the average sale price of single detached homes sold in 2017 was $510,272, up 8.3% over the same period in 2016.  The average sale price for a row style home rose by 5.8% to $335,402.

Interesting to note that in all row homes sold in 2017 had one or two garage spaces. As for detached homes, 80% of these homes had 2 or more garage spaces.

Looking at total days on market, the homes sold in Stittsville in 2017 had been on the market for an average of 48.8 days, 26% fewer days than those sold in 2016.  The average days on market for the detached homes sold in 2017 was 59.3 days while row homes, including semi-detached, sold in 25.4 days. Last year, these numbers were 72.6 and 49.8 days respectively.[2]

Finally, a look at the number of active listings in December 2017 shows 67.6% less inventory offered on the Ottawa Real Estate Board’s MLS® System[3] than in December 2016. There were 23 active listings at the end of December 2017 in Stittsville, split between 20 detached and 3 row homes.

[1] Excludes condominiums, homes on leased land and homes under construction.

[2] Days on market includes all days between the listing date and the firm sale date of the property.

[3] All data courtesy of the Ottawa Real Estate Board MLS® System.

Highlights

Homes Sold Last Year

• 557 – all (↑ 18 %)
• 385 – detached (↑ 18.1%)
• 172 – row and semi-detached (↑ 17.8%)

Average Sold Price

• $456,273 – all (↑ 7.8%)
• $510,272 – detached only (↑ 8.3%)
• $335,402 – row and semi-detached (↑ 5.8%)

Sale to Original List Price

• 5% across all types compared to 96.9% in 2016 (↑ 0.6%)
• 3% for detached home sales compared to 95.0% in 2016 (↑ 0.5%)
• 6% for row and semi-detached styles compared to 95.9% in 2016 (↑ 1.0%)

Active Listings

• 23 active detached and row & semi-detached listings combined (↓ 67.6%)
• 20 active detached listings (↓ 66.7%)
• 3 active row & semi-detached listings (↓ 72.7%)

THE YEAR IN REVIEW

This year our real estate market took everyone by surprise. At the beginning of the year, most economists were predicting a sluggish market with little or no price gains. The reality is that it was an incredibly strong year for real estate in Stittsville and Fairwinds in particular. This was fuelled by a lack of inventory in our area. This has put upward pressure on prices. Prices are up across all segments and the demand for Fairwinds is much stronger than 2016. This is evident when we look at the time on the market. The average home spent about 50% less time on the market in 2017. Let’s review the sales data for the Fairwinds neighbourhood.

MILITARY FACTOR

I have had the pleasure of working with 100s of military families relocating into and out of Ottawa. Five to ten years ago many of these clients were buying in Orleans. However, with the relocation of the DND to the west end these clients have shifted their focus. Stittsville has become one of their most sought-after communities. Stittsville is sought-after because it has a tight-knit community feel and is family orientated. The good schools, amenities, and reasonable house values always play a role in their decision. The Fairwinds neighbourhood, in particular, has always been the most popular. I often refer to this neighbourhood with my military friends as CFB Fairwinds. If you want more info on military relocations, check out OttawaRelocations.ca

GROWTH

In my opinion, Stittsville’s prices are slightly undervalued. I really do believe our community is one of the best in the city. All the major indicators seem to point to more economic growth in the city. Stittsville is beginning to get the recognition it deserves as a wonderful place to live and raise a family. With the increasing demand and tighter supply, the average prices should increase again in 2018. Take a look at this figure showing the projected population growth in Ottawa.

IMMIGRATION

Under the Liberal government, immigration has increased to over 300,000 annually. Many are settled into smaller cities but eventually make their way to the larger urban centres. Since Ottawa is the number 1 place to live in Canada, it is always a popular destination. This graph illustrates the future population growth in Ottawa.

DEBT

The biggest concern I have right now is the mountain of debt that Canadians are carrying. We have more debt per capita than any other developed nation.  This is something we will have to monitor moving forward.

FOREIGN BUYERS?

Contrary to what some people believe, Ottawa’s prices have not been rising due to foreign buyers. Not yet anyway. Right now foreign buyers own less than 0.7% of Ottawa condos and this is the same percentage as in 2014 (according to CMHC). In Vancouver, this is as high as 7.5%.

What I am seeing is some families relocating to Ottawa from Toronto. Basically cashing out in T.O. and moving down the 401. They are attracted to Ottawa because of its relative affordability, awesome lifestyle, and its location that is close to both Montreal and Toronto. As other major markets get too expensive we may start seeing more foreign buyers choose Ottawa. We are like the Switzerland of real estate.

SUPPLY/ DEMAND

Prices are usually determined by the most basic economic principle of supply and demand. This past year inventory was tight and demand was solid. I have many buyers that should have been in the market in 17′ but could not find a place because of tight supply and multiple bids. They along with many other buyers will now seek to find accommodation in 2018. I think our tight supply will continue into the new year. I think we are in for another competitive market in early 2018.

UNEMPLOYMENT

Unemployment is always one of biggest indicators when it comes to real estate prices. In Ottawa, we are fortunate to have a stable workforce anchored by the public service. Income levels support our current real estate prices and would still be able to accommodate new price gains. Essentially affordability is good. Especially compared to other markets like Vancouver or Toronto.

OTTAWA REQUIRED INCOME VS ACTUAL INCOME

MORTGAGE RATES

I sat in on a presentation by CIBC chief economist Benjamin Tal. He was asked if rates were going to rapidly increase in the upcoming few years. His response was that we won’t ever see very high rates again. We have different mechanisms and a central policy that we did not have in the 80’s/90’s when rates for homes are similar to what we are paying on credit cards.

MORTGAGE RULES: NEW STRESS TEST

The new mortgage rules will affect affordability for buyers. Insured mortgages will now need to be stress tested at the higher bank qualifying rate. This will reduce the average buyer’s purchasing power by about 20%. I am one of the few Realtors who actually agrees with this policy. We need to have buyers that can withstand any future increases in the mortgage rates. I think it is prudent and will help ensure that home buyers are not taking on debt that they can’t afford in the future. This protection will only help stabilize our market in the future.

OTTAWA CMA, MLS ® PRICE

MY PREDICTIONS FOR 2018

Homes are staying on the market for much less time and in general, the inventory has been very low. I expect this trend to continue throughout 2018 and this could once again put upward pressure on home prices. I expect it to be a very competitive market. If you have any questions this year about home values in the area or are curious about what the home down the street sold for please keep me in mind. I am happy to be the local economist/Realtor.

If you are curious about your homes worth please fill in this form for a no-obligation market assessment.