Posts Tagged ‘condos’

ANNUAL REAL ESTATE REPORT: OTTAWA 2021

Posted on: January 15th, 2021 by Chris Scott

OTTAWA REAL ESTATE REPORT

RECAP OF 2020: A Year We Will Never Forget

It was a record-breaking year of growth and price appreciation in Ottawa. Coming into 2020 our supply levels were at all time lows and demand was strong. When the COVID hit supply also dropped. The demand did not. Buyers were still very much interested in purchasing. Having a stable economy in Ottawa helped matters. The pandemic even brought other people who were not thinking about buying into the fold. Privacy and pools became high priorities for some buyers.

The end result was freehold prices up 20%! The average sale price was $582,267 in this category. Who would have thought that we would have record price appreciation in the midst of a pandemic. In the condo market prices soared over 19%! It would have been hard to predict these numbers before the start of the year. Even with the lack of inventory the number of units sold were way up too.

This thriving market is due to inventory shortage, multiple offer situations, record-low mortgage rates and buyers from larger markets. Ottawa is a resilient and sheltered market in comparison to others. Ottawa has secure government and tech sector employment that allowed many to work from home. 2021 will see a continuation of Ottawa’s solid resale market, real estate professionals were deemed essential workers and the market was only slightly shaken by the world-wide pandemic. This market is very active, insulated, and strong.

Average sales prices are for 2020 based on MLS sales.

Combined is for all property classes. Arrows are gains from 2019.

OTTAWA REAL ESTATE REPORT

FORECAST 2021 

We are entering the year in the midst of rising COVID cases and economic uncertainty. Not to mention some political unrest with our neighbours to the South. This is a unique place to begin. From a real estate market perspective, I look at the supply and demand metrics to determine where things may be going. We enter this year with very few homes for sale, the sales being recorded so far are noticeably higher than last year. Our supply is exceptionally low and demand still quite high. This will once again make Ottawa a very competitive market for 2021.

Ottawa is a growing city, and I am not sure there is a long-term solution to this price acceleration. Rising prices may be a common theme for the foreseeable future. The biggest change I see in the years to come is in the luxury market. There are many more 1M plus buyers out there now.

Half a million can barely afford you a townhouse now in suburbia. It is kind of surreal thinking about my average sale price in my first year in real estate. It was around $220,000.

I do predict that freehold prices will continue to appreciate at a higher level than condos. Many major projects in Ottawa are in the building stages with dozens more approved. At some point we will have enough condos to satisfy demand. That will come sooner than on the freehold side. Some condo owners have felt a bit trapped with COVID and working from home. I have had a few reach out to change into a freehold and have a bit more space to spread out.

OTTAWA REAL ESTATE REPORT

KEY INDICATORS

WORKING FROM HOME: THE NEW NORMAL

Ottawa’s solid public sector is a great foundational piece to our economy. This represents 20% of the workforce in Ottawa. These jobs are high earnings and are very secure. Ottawa is in a unique position to have so many jobs that can be done remotely. The high-tech sector in Ottawa has been booming, tech-giant Shopify has made working from home permanent for their employees. This has kept our local economy sheltered from what is happening elsewhere. It may also have an impact on where people decide to live. With many working from home permanently extra space is becoming more desirable.

 

SUPPLY TRENDS LOWER FOR FREEHOLDS & CONDO

This graph illustrates the supply available in the Ottawa real estate market. It is so interesting to see where we are from an inventory perspective when compared to the last 15 years. Supply remained low for 2020, and we are starting out 2021 with very little inventory.  This is the heartbeat of the market. As we witnessed in 2020 with inventory this low, prices were pushed way up as buyer competed for homes. Early 2021 seems to be trending in that direction as well. Will be an interesting year!

 

INCREASED USE OF TECHNOLOGY

I think that the way people buy and sell real estate will forever be impacted by COVID. This year has proven that we can do so much virtually. Our team has sold 10 homes to buyers from out of town (mostly military) who never actually stepped foot in the house they purchased until closing day. We would virtually walk them through the house and usually have a 3D tour to share with them. I am not suggesting everyone would have a comfort level with that. However, if you could have me walk you through a house while you are in the comfort of your own home, would that be beneficial? Some buyers are opting for this for the first visit and then coming through if they like what they saw on the virtual visit.

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

ANNUAL REAL ESTATE REPORT: OTTAWA 2020

Posted on: January 14th, 2020 by Chris Scott

OTTAWA REAL ESTATE REPORT

RECAP OF 2019

It was an incredible year of growth and price appreciation in the Ottawa real estate market. Prices were up in all categories. Year-end figures show the average freehold property sale price was $486,590 in 2019. This represents an 8.9% increase over the previous year. In the condo market prices soared over 9%! It would have been hard to predict these numbers before the start of the year.

These incredible gains are being fueled by the lack of supply and strong demand for Ottawa real estate. As the year went on the supply tightened and this put upward pressure on prices. The prices really started to push up in the 2nd half of the year. In some neighbourhoods in Nepean and Ottawa west, I have seen a price appreciation of 6% between sales in March and sales in September. This is because supply tightened as the year went on and in addition, more buyers entered the marketplace.

In 2019 Ottawa’s population grew to over 1 million people. Our city is maturing into a world-class capital before our very eyes! The new LRT line was unveiled and many new projects are on the way. Legacy projects like the civic hospital relocation, LRT expansion, and Lebreton flats redevelopment are on the horizon. This combined with the insatiable demand for Ottawa real estate should keep our construction market strong for the foreseeable future.

Average sales prices are for 2019 based on MLS sales.

Combined is for all property classes. Arrows are gains from 2018.

OTTAWA REAL ESTATE REPORT

FORECAST 2020 

The Ottawa real estate market is showing no signs of weakness. Supply issues will persist in 2020. I don’t expect the inventory will recover in the near future. The absorption rate of our current inventory is like nothing we have seen before!   Prices are expected to continue to grow over the upcoming few years. The demand for our real estate is at an all-time peak. This trend will continue to put upward pressure on prices throughout the next few years. Although prices are going up relative to our income we are actually still in a sustainable position. Prices in Ottawa, when compared with our earnings, are still affordable.

 

Below you can see a table of real estate prices in Ottawa since 1981. The only declining years are in red. The table illustrates just how stable our market is. The only declines were consecutive (94-96) and houses lost less than 3% in each of those years. If you were at a craps table and saw this much black on the board how much money would you be prepared to invest. If you are a long term investor it would be pretty hard to find a scenario where you could lose.

Based on OREB RES & CON MLS Sales | 2020 Prediction

OTTAWA REAL ESTATE REPORT

KEY INDICATORS

OTTAWA: RELATIVELY HIGHER EARNINGS

Ottawa’s solid public sector is a great foundational piece of our economy.  This represents 20% of the workforce in Ottawa. These jobs are high earnings with very good security. When I think of my own network of friends, almost every couple has at least one person working for the government. In some cases, both spouses work there and this creates some very high household income. This past year saw a 6.9% increase in our weekly average income. We have not seen that kind of income growth in Ottawa since 2001. When we see our earnings higher than our neighbours down the 401, it surprises some people. Of course with the financial sector in Toronto, there is more wealth and one-percenters. Ottawa just does a better job with the distribution of wealth.

 

SUPPLY TRENDS LOWER FOR FREEHOLDS & CONDO

Supply is the single biggest issue in our market. It is so interesting to see where we are from an inventory perspective when compared to the last 15 years.  We are at the lowest point in both the condo and the freehold segment of the market. Look at the condos available in 2015! Over 6000 on the market. This is the heartbeat of the market. When we see inventory this low,  prices can only go in one direction! The little secret I have been telling people about Ottawa’s bargain real estate prices is out! Our market is on fuego.

 

STEADY EMPLOYMENT GROWTH EXPECTED

The local economy and job market in Ottawa are solid. Steady job growth is expected to continue over the next few years. It is good to see that full-time job growth is up 5%. This is important because people that occupy full-time jobs are much more likely to be approved financially to purchase real estate.  Our capital city also is one of the hottest and most diverse tech hubs in North America. Overall the health of our local economy couldn’t be better.

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

 

OTTAWA MARKET UPDATE: SEPTEMBER 2019

Posted on: October 11th, 2019 by Chris Scott

OTTAWA MARKET UPDATE SEPTEMBER 2019

The fall market is feeling a bit like the Spring market this year. There is the same sense of urgency with buyers and sellers are getting premium prices for their homes. Our team just had a house go up for sale last week and we priced at the higher end of the market. We had over 90 people through the open house and it sold for $65k more than what they were asking. Frankly, I was surprised at such a favourable outcome for our clients. They were quite shocked to see the end selling price.

We have not seen September sales numbers like these in 15 years! We had 1549 properties change hands including condo and residential properties. This is up from 1386 from last year. The numbers would have been even higher if there were good available houses for sale. It is quite remarkable that purchasers are finding houses that meet their needs so well with such little inventory. Buyers are just less picky this year because they know the challenges they face to secure a house.

It is a tough market for buyers but we have had some great successes over the past few months. Buyers just need to be a little patient and strike when the right property becomes available. They also need great representation now more than ever!

The sweet spot price point remains the $350,000 to $500,000 price point. This accounts for 43.5% of all sales in September.

Every neighbourhood is unique. If you want to know what is happing in your area please feel free to get in touch.

 

OTTAWA MARKET UPDATE SEPTEMBER 2019

OTTAWA MARKET UPDATE: AUGUST 2019

Posted on: September 9th, 2019 by Chris Scott

OTTAWA MARKET UPDATE AUGUST 2019

Summer is over and the fall real estate market is getting back into full swing. I have noticed already just a few days into September that activity is picking up with buyers and sellers. The fall is typically a very busy time to buy and sell in Ottawa. This year might go down as the busiest ever. There are so many buyers out there just waiting for available homes. Our inventory levels were down quite a bit in August and yet our sales were up when compared to last years numbers. You don’t need to be a rocket scientist to know that this will continue to put upward pressure on prices.

There has also been lots of talk of a recession looming. I think this might be inevitable as the US has gone through the longest recovery in history since their last slow down. However, the most common misconception out there is that housing prices always go down in economic slowdowns. That is just not true. The last economic meltdown in the states, of course, resulted in lower prices but that was because the crisis was directly linked to the wild wild west lending practices in the market.

Bottom line is that interest rates are low, Ottawa’s economy is great, and prices are reasonable relative to our average earnings here. I see strength in our Fall market for sure.

Let’s take a look at the numbers:

OTTAWA MARKET UPDATE AUGUST 2019

OTTAWA MARKET UPDATE: JULY 2019

Posted on: August 13th, 2019 by Chris Scott

OTTAWA MARKET UPDATE JULY 2019

The Ottawa real estate market had a great July.  We have not had this kind of activity in a July for 15 years. Typically after a busy Spring market things slow in the summer. This year is the exception.  We had over 1800 sales on the MLS system. There is just so much demand out there right now for Ottawa real estate. I am starting to see more inventory come to market which is good news. Hopefully, this will lead us back to a more balanced market. Right now there is around a 1 months supply of housing. This is deep into a sellers market.  We would need to get to at least a 3 month supply to start getting closer to something more balanced.

The condo market had another strong month. Condo prices have fully recovered and you can see by the sales numbers that this segment of the market is having a resurgence. This is good news for condo owners and builders. Lots of optimism surrounding the Ottawa market right now. I anticipate a very strong fall market. If you are curious to know what’s happening in your Ottawa neighbourhood feel free to get in touch.

OTTAWA MARKET UPDATE: JUNE 2019

Posted on: July 11th, 2019 by Chris Scott

 

The average price of a residential-class property in June was $500,700. This is the first time we have ever eclipsed the half-million mark in Ottawa. When I first started in real estate 15 years ago 500k was a big number! People would say half a million like it meant something! Hard to believe it is now just average. Many first time buyers are now buying at this price point. It is just the nature of a really healthy local economy, immigration, and the increasing appeal of our real estate market to investors. Maybe in the next 10 years, 1 million will be just an average number. At this pace, you never know!!

Inventory has been sliding in Ottawa. In June our inventory was down 23% from the same time last year and over 30% from just two years ago. Condo listings were down 50% from 2017. Just the drop in this inventory is enough to put upward pressure on prices. Combine that with growing demand and we are seeing double-digit increases in some neighbourhoods. It is definitely a seller’s market but for the most part, buyers are restraining themselves a little bit. They understand the value, many homes priced on the high side of the market can continue to sit.

OTTAWA MARKET UPDATE: MAY 2019

Posted on: June 12th, 2019 by Chris Scott

 

May is typically the busiest month of the year for real estate sales. This year was one of the most active Mays I can remember. We had higher sales volume while dealing with a freefall in available homes for sale. This meant that many of the listings available were sold in multiple offers for the above-asking price. Our team in just the past few weeks have been involved in over a dozen of these situations both on the buyer and seller side of things. There has never been a more important time to have a Realtor guide you through these difficult and stressful situations. There is lots of money on the line on both sides of the equation. Our market is constantly changing.  What sold 5-8 months ago in some neighbourhoods is totally irrelevant to what’s happening now. There are many micro markets in the city that I am seeing different trends. Same can be said about price points. As an example, the 350k to 500k price point accounts for 42% of all Ottawa sales. If you want to find out what’s happening in your area feel free to get in touch.

 

OTTAWA MARKET UPDATE FOR APRIL 2019

Posted on: May 7th, 2019 by Chris Scott

 

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.

 

 

OTTAWA MARKET UPDATE FOR MARCH 2019

Posted on: April 8th, 2019 by Chris Scott

 

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.

 

OTTAWA MARKET UPDATE FOR FEBRUARY 2019

Posted on: March 7th, 2019 by Chris Scott
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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.


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