The market is B-A-N-A-N-A-S! Was trying to think of a more eloquent word but bananas seems to fit here. Here are three reasons why:
Prices in our residential-class properties are up 21%
Prices in condo class are also up 21%
Over 58% of homes are selling for above their asking price (feels like 100%)
It is a tough market right now for buyers. They (and their agents) have to go through the process usually a few times before they can secure their house. Sellers hold all the cards! However, many sellers are also buyers. This has added to the inventory issue. Many sellers do not want to sell until they buy. So round and round on the no inventory hamster wheel we go!
There are not enough new listings to satisfy the growing demand for Ottawa properties. Much of the demand is the entry-level $400,000- $550,000 market. About 40% of all sales are in this price range. I am seeing very competitive offer situations in that range. Many homeowners are listing very low and creating a frenzy on the offer date. This is partly to blame for the high over-asking sale prices. It is frustrating many buyers too. To have to keep going higher and higher to secure the deal is no fun!
Investors are quietly playing a role in the frenzy too. I am seeing lots of out of town buyers coming in and buying up properties. Again, mostly in the entry-level range. This week I have seen a bit more inventory coming to the market. I hope this is a trend that continues.
If you would like to see some sales in your neighbourhood, let us know and we can send you a report on your area. Every neighbourhood is very different.
We have talked quite a bit about inventory in the past few months or the lack thereof. Right now this is the Ottawa real estate market’s biggest challenge. There were only 1082 properties that came for sale in January 2020. That is about 50% less than the average. Then you look at the 780 sales in January 2020. This represents a very high absorption rate. This absorption is most prevalent in the $400,000 to $555,000 range, this represents over 40% of January 2020 transactions.
Buyers are getting increasingly frustrated. Some have put their searches on hold. I don’t recommend this. I do believe we will get more supply in the next year but I think price appreciation will continue. A balanced and fair market is still at a minimum a year or two down the road.
Ottawa’s market increases are still sustainable and reasonable when you consider our high average income. It is just a bit shocking to see how rapidly some of the price appreciation is happening in certain neighbourhoods. I think this appreciation is in some part due to the fact that Ottawa has been very much undervalued in years past. Not anymore! I think the new reality is here to stay for a while. Every neighbourhood and segment of the market is unique. If you want to know what is happening in your area please feel free to get in touch.
Another year is almost in the books! This one has flown by. This year has been the most active housing market I have experienced. The numbers bear that out. In November new listings were being absorbed by buyers at a record-setting pace. Here is what our board president had to say:
“Our inventory is not having a chance to build as it is being absorbed as quickly as it comes on the market. That’s why there are so many sales every month even though the supply stock is low,”
If we compare November of this year to last year, the price difference is almost shocking! See the statistics in the chart. We are up 16.9% on the freehold side and 9.8% on the condo side of things. At the start of next month, I will be providing a very detailed annual market report that breaks down all the numbers.
There is a slight cause for concern with the recent announcement that Canada lost over 71,000 jobs in the last month. This represents the largest drop in employment over a one month period since the financial crisis. Ottawa is always sheltered from this unless it hits the public service. Something to keep an eye on for sure.
If you want to know what’s happening in your neighbourhood, please feel free to reach out.
It is a winter wonderland out there already. What the heck is going on! A snow day on Nov 12th is madness!! Some people may be wondering if the cold weather will put a chill in this hot real estate market. I am not sure that will be the case. The numbers from October reveal that there is some madness in that regard too!
Our market is summed up nicely by our board president:
“New listings are down, inventory remains scarce, and yet more homes changed hands this October than in the past decade and a half,” reports Dwight Delahunt, President of the Ottawa Real Estate Board. “It’s perplexing at first; however, when you consider the current breakneck transaction pace in the Ottawa resale market, often requiring homebuyers and sellers to make swift decisions, it makes sense.”
When I analyze the market it is clear to see we are firing on all cylinders. What I see is that for the first time you have all segments of the market including condos and freeholds beings extremely desirable to buyers. In years past it might have been the condo market that was hot or the last few years, it was more about the freehold market. Often times it could be different locations that were “hot”. This year it seems to be every segment in almost all locations. Especially West of downtown. The hottest locations are experiencing price increases of over 5% when compared to March and April of this year!! Many buyers back in the Spring were patient and that patience is long gone with buyers now realizing they have to pay a big premium (in some cases) to secure their home.
I get why our market is what it is. We have been undervalued for a long time. I have said this in my annual reports for years. Even now in relation to our average earnings and the extremely high quality of life in our city, I can still make that case. It is just not much of a secret anymore! If you want to know what’s happening in your neighbourhood let me know. We are always happy to be a real estate resource for you.
As part of a full-service real estate team, each week I preview and show several properties to various buyers, and host open houses for our seller clients whenever possible. The 2 most common questions I hear day-to-day are:
1) Why are the current owners selling?
2) What is the square footage of the house?
Interestingly, as licensed members of the Ottawa Real Estate Board, we are not permitted to display the square footage on any listing. Whatever the reason behind this rule, the fact remains.
Square footage can be important when comparing the property value of the property with another, or even just to assess if there is enough space to hold all of your current furniture and effects (and growing family members). For appraisals and assessments, it is often measured by simply multiplying the length and width of the exterior walls of the house. When you consider this, overall useable Living Space can become a more essential factor to consider.
What are the reasons that are motivating you to make a move?
Do you need more overall space, more closet space, or a more open-concept space?
Some homes have unique jogs and cut-outs along walls and ceilings, reducing the amount of space you are able to occupy or renovate. An older century home may have a large den, parlour, and dining room, and therefore an increased footprint, yet also have a long hallway upstairs and 3 bedrooms with gabled ceilings that are a nuisance to you and your growing children… and no master en-suite. Or, a previous owner may have blown out a bedroom wall to create their dream en-suite + walk-in closet, and now Mr & Mrs Buyer are handcuffed because despite 2000+ sq ft above grade, what they really need is another bedroom. Or, 4 large bedrooms and a loft upstairs might not be enough if there is no room on the main level for the home office you really need.
There are many things to consider when buying your next home. A deal-breaker to one buyer may be a non-issue to another. A great idea for everyone is to take some time to write a list of your Wants and Needs in a new home, get on the same page with everyone involved, and enlist the service of a licensed Realtor who can help you stick to your plan and make informed, objective decisions in order to achieve your individual real estate needs.
