When looking back on last year, it’s important to know that February 2022 represented the absolute peak of our local real estate market. We had the perfect storm of low-interest rates, high demand and extremely low inventory which of course caused prices to spike. This year our market is in a very different situation. We are very much a balanced market that can stay there if interest rates stay the course. If they rise we will see us move toward a buyers market.
Our current market is a much more reasonable place to buy and sell real estate. From what I’m feeling on the ground is that buyers are starting not only to look at properties more but are also engaging and making offers. Just this last week I noticed a few listings that have been on the market forever finally sell. I think this is indicative of more buyers feeling comfortable that we are indeed at the bottom of this market cycle.
There were 855 residential properties were sold in February 2023 compared with 1,411 in February 2022, a decrease of 39%. February’s sales included 633 in the freehold-property class, down 42% from a year ago, and 222 in the condominium-property category, a decrease of 31% from February 2022. The five-year average for total unit sales in February is 1,157.
If the Bank of Canada holds interest rates steady, buyers will have more certainty to work with as we head into the spring market.
The average sale price for a freehold-class property in February was $708,968, a decrease of 15% from 2022. However, it marks a 5% increase over January 2023. The average price increase for freeholds over January could be an indicator that buyers have normalized to the current interest rates. And perhaps, it’s a glimmer of more activity to come in the months ahead.”
The average sale price for a condominium-class property was $410,927, decreasing 12% from a year ago.
With year-to-date average sale prices at $695,086 for freeholds and $411,449 for condos, these values represent a 14% decrease over 2022 for freehold-class properties and a 10% decrease for condominium-class properties.
Months of Inventory for the freehold-class properties has increased to 2.8 months from 0.7 months in February 2022.
Months of Inventory for condominium-class properties has increased to 2.5 months from 0.7 months in February 2022.
February’s new listings (1,366) were 22% lower than February 2022 (1,762) and up 3% from January 2023 (1,323). The 5-year average for new listings in February is 1,632.
Days on market (DOM) for freeholds decreased from 43 to 37 days and 47 to 43 days for condos compared to last month.
Every neighbourhood in Ottawa is different and will have trends that are unique to your area. If you want to know what your home is worth please feel free to get in touch with our team. We are always happy to help.
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 February 28, 2022, over January 1, 2023, to February 28, 2023.
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!
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.
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.
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.
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.
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.
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.
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®.
