Ottawa Housing Market Remains Healthy, With Condo Sales Back On Track

Activity in Ottawa’s real estate market picked up towards spring, and housing inventory continued to fall, making for an overall healthy market, but moving some neighbourhoods and price ranges within the scope of a seller’s market.

Blue_sky_cherry_blossoms_High_Res_CROPPED.jpg

“I would consider it to be a buoyant market. Economic forecasts for the start of 2018 proved overly positive, especially given the loss of 88,000 jobs in Canada in January. There was a small improvement in job growth in February and this increase was mostly in parttime employment,” says Patrick Morris. The Bank of Canada trendsetting rate in March remains unchanged after three rate hikes since last summer. This is good news for borrowers. “It’s unlikely there will be any major interest rate increases until later in the year, because the national job numbers aren’t as strong as what some analysts were predicting, and there could be unforeseen geopolitical influences that could impact Canada’s economy. However, the Ottawa region has a strong and steady employment base compared to many areas in the country,” adds Patrick.

Housing inventory in Ottawa is on the radar as a potential concern. Morris Home Team sales representative Rob Kearns notes, “The market is starting to get more active, and there aren’t enough quality listings to meet buyer demand in some areas. We’re seeing more intensity in the market than we normally see through the winter.”

The number of homes available for sale in February 2018 was 26.6 per cent lower than in February 2017, dropping from 3,414 to 2,506. Patrick observes, “In some areas and in some price ranges, it’s a seller’s market, but generally we continue to be in a strengthening balanced market.”Highlights_at_a_glance.JPG

During the first two months of 2018, members of the Ottawa Real Estate Board sold 1,689 properties through the Multiple Listing Service system (residential and condos combined). This is a modest increase of 1.4 per cent compared with the 1,666 sales for the same period in 2017. Year over year to date, sales of residential properties decreased 3.7 per cent, but rose a whopping 20.5 per cent for condos.

The surge in condo sales has been a long time in coming. “The condo market has rebounded—finally—so we’re back into a positive situation now,” says Patrick, “but it’s taken many years to get to this point.”

The absorption rate for both residential and condo properties has declined significantly since last year, indicating a healthier overall market. This inventory-to-sales ratio identifies how long it would take for all current listings to be absorbed in the market, i.e., how many months it would take to sell all listings if no new listings entered the market.

In the residential sector, it would take 3.4 months to sell all the 2,506 active properties in February 2018; it would have taken 4.4 months during the same month last year. In the condo sector, the drop was even greater. In February 2017, it would have taken 5.5 months to sell all the 1,287 condos for sale. In February 2018, it would take only 3.5 months to sell all the condos listed.

The most active price range for residential property sales continues to be between $300,000 and $499,999, representing nearly half of residential property sales in February, while more than half of condos sold were in the $150,000 to $249,999 range.

“We’ve noticed a continuing uptick in confidence from buyers, and there’s still a lot of pent-up demand,” says Patrick.

ASK PATRICK

Is the Price Right? How to List Your Home for Success

Your home is your sanctuary. Friends and neighbours might tell you they love what you’ve done with the place, but how many times have you heard a relative say, “I wouldn’t have chosen that colour,” or “Why did you do that to the kitchen?” Worse, when you put your house up for sale, everyone has an opinion on your list price. Friends and neighbours often say you’re not asking enough because your agent only wants a quick sale. Your relatives, meanwhile, come back with, “You’re asking HOW much?” Buyers, like relatives, are blunt. To have them make positive remarks about your listing price and come up with a market-value offer, follow these key pricing strategies:

Sold_Sign_graphic.jpg1. Review the “Sold” Listings in Your Area:
Contact your Realtor and review the “sold” prices of similarly sized properties in your neighbourhood. This is the most important part of the process, because this critical data will tell you what serious buyers are willing to pay for a comparable home in your area.  When reviewing these sold listings, you’ll need to adjust your list price to reflect any differences in specific location, lot size, updates, upgrades, condition inside and outside (this is very important), garage, time of year, etc. In a balanced real estate market, price your property at the most recent sale price or close to the last sale price. This will give you the best chance to get a full-price offer. You might even get more!

2. Review the Current Active Listings in the Area: Examine all the current properties for sale—your competition. Buyers will compare your home to these listings. You’ll need to choose a list price that is compelling enough to attract the right buyers. Always price your property slightly lower than the competition so that your home is the most attractively priced listing. Your goal is to always look better than the competition.

3. Review How Many Homes Are Being Absorbed by the Market Every Month: Your Realtor will share this information— often referred to as the Absorption Rate (AR) analysis—with you. It’s more work for your Realtor, but it will help educate you on the supply and demand in your area. To determine the AR, calculate the average number of homes sold in the last six months. Then, take the number of homes currently for sale and divide this number by the average number of sales each month. For example, if 20 homes are selling each month and there are 60 current houses for sale, the AR is 3. This means it will take three months to sell the current listings inventory when 20 homes are selling each month. Reviewing this analysis will indicate if you are in a buyers’ market, a balanced market, or a sellers’ market. If there is an increase in the AR, you are entering into a buyers’ market. If the AR remains constant at three months, you are in a balanced market. If the AR decreases, you are moving into a sellers’ market.dreamstime_house_entrance_landscaped_yard.jpg

A property will sell at market value if it’s listed at the right price. Listing at the right price increases your pool of buyers. Competition creates excitement, which normally nets you a market-value offering price.

Market-priced listings sell faster. Why? Most buyers spend up to a few months looking for a home. When a new listing comes on the market, these buyers rush to view it. If they like what they see and the list price is at market value, these buyers will submit an offer. This first offer is often your very best one. I can give you hundreds of examples where sellers did not accept the first offer, only to end up selling for tens of thousands less. All top Realtors know that your first offer is usually the best you’ll get. It’s better to get market value at the beginning than to sell for less than market value several months later.

If you follow these important steps, you’ll price your house correctly and it will sell at market value. Your neighbours, friends, relatives and, most importantly, you and the buyer of your special sanctuary will be happy.

Need Help Selling Your Home or Finding the Perfect House?

Call or email us!  You can rely on our intimate market knowledge and professional service!  

icon_1_in_ottawa_smaller_file.jpg

Patrick_and_Rob_side_by_side.JPG