Posts Tagged ‘Buying in Ottawa’

OTTAWA MARKET UPDATE: JANUARY 2023

Posted on: February 14th, 2023 by Chris Scott

With interest rates potentially holding steady the Ottawa market may be on the verge of heating up. Buyers are still super cautious but there are plenty of well-qualified buyers in the marketplace right now. Judging by full open houses and good showing activity. The challenge is that no buyer wants to make a large purchase now only to see things further reduced in 6 months from now. So many are just waiting. The ones that are making offers may just be rewarded. Warren Buffet always said to buy while others are weary. The thing about real estate is that we know we are way off the peak and the chances are that in the next few years we will be up and over the earlier highs of 2022.

If I was to sum up our market in one word it would be cautious. The numbers reflect that. The price of a residential home is down 12% from January 2022, down to $676,272, condo pricing is down as well, 8% from January 2022, sitting at $412,244. In terms of units they are also down from January 2022, 30% down for residential and 46.9% down for condo units sold.

As always please feel free to reach out to our team, if you have any questions, or if you would like to know what is happening in your neighbourhood!

SUBURBAN STATISTICS UPDATE JANUARY 2023

Posted on: February 13th, 2023 by Chris Scott

Here is the most recent installment of our new monthly value-added feature, the Suburban Statistics Series. This series showcases statistics for the 5 largest urban neighbourhoods in Ottawa.

As Ottawa is such a spread-out city it’s great to see the variances from area to area. All of these statistics are based on MLS OREB sales from January 1, 2022, to January 31, 2022, over January 1, 2023, to January 31, 2023.

INTEREST RATES RISE AGAIN

Posted on: January 27th, 2023 by Chris Scott

 

The Bank of Canada announced a small interest rate hike this week, up .25%, seeing the rate now sitting at 4.5%. This is the smallest of the rate increases since last March. I don’t think it will make a big impact in Ottawa. What this will do is bring further stability to our market and in turn help buyer confidence.

The overall goal of the Bank of Canada is to dampen inflation through a series of interest rate hikes. This campaign of rate increases to curb inflation has been ongoing since March 2022. This is the eighth time in less than a year that the rate has been hiked. Let’s hope this is the last of it.

 

ANNUAL REAL ESTATE REPORT: OTTAWA 2022 IN REVIEW

Posted on: January 17th, 2023 by Chris Scott

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

FORECAST 2023

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.

KEY INDICATORS

Population Growth

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
Inventory

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

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Home Evaluation

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.

 

SUBURBAN STATISTICS UPDATE NOVEMBER 2022

Posted on: December 16th, 2022 by Chris Scott

Here is the second installment of our new monthly value-added feature, the Suburban Statistics Series. This series showcases statistics for the 5 largest urban neighbourhoods in Ottawa.

As Ottawa is such a spread-out city it’s great to see the variances from area to area. All of these statistics are based on MLS OREB sales from January 1, 2021, to December 13, 2021, over January 1, 2022, to December 13, 2022.

OTTAWA MARKET UPDATE: NOVEMBER 2022

Posted on: December 13th, 2022 by Chris Scott

The Ottawa resale market has continued to cool this past month. Sales are down by 42% over November of last year. With average prices down 5.2 % in the same period. Important to note however prices are still up YTD by 7%.

The decline in sales volume is concerning. Buyers are just waiting to see where the economy and real estate market are going before making a purchase. The interest rates have gone up another 50 basis points which will freeze out some buyers while others may start looking in different price ranges to make it work. All to say homes are still changing hands just at a much slower pace. The average time a home stays on the market is now 50 days. For context, it was 25 last November.

With the Bank of Canada saying they may be done with rate hikes now might be a good time for buyers to execute on their purchases. Prices are reasonable and buyers have some negotiating power. I do think we will get off to a sluggish start in 2023 but when the economy performs better than expected hopefully, we can get things back on track for a very balanced market that will slightly benefit buyers.

SUBURBAN STATISTICS UPDATE OCTOBER 2022

Posted on: November 11th, 2022 by Chris Scott

As a new monthly value-added feature, we present the Suburban Statistics Series. Each month we will present statistics for the 5 largest urban neighbourhoods in Ottawa.

As Ottawa is such a spread-out city it’s great to see the variances from area to area. All of these statistics are based on MLS OREB sales from January 1, 2021, to November 8, 2021, over January 1, 2022, to November 8, 2022.

OTTAWA MARKET UPDATE: OCTOBER 2022

Posted on: November 11th, 2022 by Chris Scott

The market is still absorbing the most recent interest rate hikes. It has had an immediate impact on the market. Houses are more expensive for the average consumer due to the higher rate which will continue to put downward pressure on prices. There is also a consumer confidence problem. Many would-be buyers are concerned about the market and making a major purchase when prices are on the downswing.

In October OREB saw 2,047 new listings hitting the market, slightly above the 5-year average of 1,971. Prices have taken a slight dip of -5.4% for a residential home when compared to the same month last year. Tough times out there right now for sellers. You can really see the drop off in the amount of sales. We are down 40% from October of last year. In the last 3 weeks I have seen a slowdown in almost every area. Well-priced homes are taking much longer to sell. I predict we will be getting close to an average of 60 days on the market by the end of the year.

All that to say for buyers there is some good value out there right now. Especially if they have their rate locked in before recent increases. Ottawa always weathers economic downturns better than any major market centre. Buyers will never know where the bottom is. Important when you find value to lock in and get in the market. Much better than sitting on the sidelines and joining in when news is more optimistic because by that point prices will already be going up and you may have increased competition. Also, it is important not to speculate in the market. Any purchase right now should be made with a longer-term plan.

If you would like to see more focused statistics, click on our most recent blog post below that showcases Suburban Statistics for the 5 major neighbourhoods in Ottawa. Or if you would like to know what is happening down the street or in your neighbourhood, please reach out, we are always happy to help.

Conditional Upon Sale of Buyer’s Current Property, What Does it Mean?

Posted on: November 3rd, 2022 by Chris Scott

The Ottawa real estate market has shifted in many ways over the last few months. One thing we are seeing more of is conditional offers being accepted by sellers. In some cases, a buyer is even able to make their purchase conditional upon the sale of a current property. This is great news for buyers who are relying on the funds they receive from the sale of their present home (or cottage or investment property) to finance the purchase of their next property.

There are two parts to this condition. The first part defines the subject property to be sold and gives an appropriate amount of time for the buyer to secure an accepted Agreement of Purchase and Sale (example below):

“SALE OF CURRENT PROPERTY: This Offer is conditional upon the sale of the Buyer’s property known as 123 Main Street, Ottawa ON, K1K 2A2. Unless the Buyer gives notice in writing delivered to the Seller personally or in accordance with any other provisions for the delivery of notice in this Agreement of Purchase and Sale or any Schedule thereto not later than 11:59 PM on November 30, 2022, that this condition is fulfilled, this Offer shall be null and void and the deposit shall be returned to the Buyer in full without deduction. This condition is included for the benefit of the Buyer and may be waived at the Buyer’s sole option by notice in writing to the Seller as aforesaid within the time period stated herein.”

The length of time given to sell the buyer’s property will change according to the average number of Days on Market in that area, and other factors. The buyer should expect the listing agent to ensure that their property is already listed on MLS (or very close to it), and that it is priced in a way that will promote a quick sale and sufficient sale price from a qualified buyer.

“Provided further that the Seller may continue to offer the property for sale and, in the event the Seller accepts another Offer satisfactory to the Seller, the Seller may so notify the Buyer in writing by delivery to the Buyer personally or in accordance with any other provisions for the delivery of notice in this Agreement of Purchase and Sale or any Schedule thereto. The Buyer shall have 72 hours from the giving of such notice to waive this condition by notice in writing delivered to the Seller personally or in accordance with any other provisions for the delivery of notice in this Agreement of Purchase and Sale or any Schedule thereto, failing which this Offer shall be null and void, and the Buyer’s deposit shall be returned in full without deduction. This condition is included for the benefit of the Buyer and may be waived at the Buyer’s sole option by notice in writing to the Seller as aforesaid within the time period stated herein.”

Even after accepting an offer with this condition, the seller is allowed to continue to market their property for sale. If they accept another offer, they will notify the original buyer- at which point the original buyer can decide to remove their condition(s) and secure a firm agreement for the property OR walk away from the purchase without penalty.

If you are a buyer who will need this condition in an offer, this is a fantastic time to be in the market for your next home. Prices have softened since the beginning of the year, and supply in many areas is high enough that there are often multiple properties that fit your criteria. This condition can be a valuable tool for buyers, yet there is a lot to consider. The most important part of having this condition included in a successful offer is planning. Speak to your Realtor today about how best to plan your next move and leverage the current conditions to your advantage.

This blog was a contribution from our team member Colin Raines, Realtor®.

OTTAWA MARKET UPDATE: SEPTEMBER 2022

Posted on: October 18th, 2022 by Chris Scott

The market continues to slow as the rising interest rates work themselves through the market. There seems to be a standoff in the market right now. Buyers can’t afford early-year prices with the high-interest rates while some sellers are still holding out for prices that are simply not there anymore. In turn, many sellers are waiting for conditions to improve before selling. The buyers that are active are being very careful in their approach.

In most areas, we have entered a balanced market. We have left the seller’s market that has been for the past 5 years or so. Very interesting times. The next question to be answered is if we will retreat to a buyers’ market for the first time in a decade. That remains to be seen. The new listing inventory is still pretty low so the supply might not be there to get us into that market in the short term.

In terms of pricing, prices are stable for the most part with slight movement each month. This stabilization will help give buyers confidence that maybe our market has bottomed out. The bank of Canada holds that hammer in this regard. Another interest rate increase could change this but I don’t predict the large increases that we have witnessed over the past few months. I think it is important they protect the economy and hope that inflation will subside based on the cuts they have already made. Just my opinion as I am not an economist.

One thing is for sure it will be interesting to see how the rest of the year plays out. As always, if you have any questions or would like to know what’s happening in your neighbourhood, please reach out!