The winter of 2014 did not make many home buyers and sellers happy. The wind chills were frigid, the polar vortex kept hanging on, and the Rideau Canal Skateway's Beaver Tails were the hottest item going!
“Yes, the weather had a somewhat cooling effect on the Ottawa real estate market in January and February,” said Patrick Morris. “The Ottawa Real Estate Board reported a decline of 3.7 per cent in the total number of residential and condo sales in February this year compared with February 2013. Looking at the data more closely, I noticed that the number of residential sales declined only 1.3 per cent, but the number of condo sales dropped 10.9 per cent.
“The number of residential sales year to date to the end of February decreased marginally,” added Patrick, “and the number of condo sales shrank by 9.9 per cent compared with the same period last year.”
Another interesting piece of data was the average number of days it takes to sell a home. Residentially, the number of days on market increased by 14.4 per cent to 57 days, year to date. The average number of days for a condo to sell ballooned 56.3 per cent, to 77 days.
“Although it is taking much longer for properties to sell in both the residential and condo sectors,” observed Patrick, “it’s the condo segment that concerns me. There is an especially large inventory of new condos. It will take a long time for these condos to be absorbed by the market.”
The real estate board’s results to the end of February showed that nearly 83 per cent of all residential sales year to date were priced at less than $500,000. This percentage has been fairly consistent for the last couple of years. By contrast, 83 per cent of all condos sold for less than $350,000.
Patrick noted, “We are not in a sellers’ market, which was prevalent during the previous decade. In the mainstream residential price range, Ottawa is in a steady and balanced market. This means there is a good supply of properties for buyers to look at, and the number of homes on the market is equal to the demand. Home prices are generally stable and may increase moderately; it is a more relaxed atmosphere for the buyer.”
On the other hand, said Patrick, “The condo category, right now, is characterized as a buyers’ market. This sector has more supply than demand, there are fewer buyers, and condos stay on the market much longer. Prices and the number of sales tend to drop, and sellers have less negotiating leverage.
“All markets rebound at some point, but if you are thinking of buying a condo, this is one of the best times to buy.”
The city placed fourth out of 201 cities in the magazine’s rankings, which are “data-driven” and take into account 34 different factors, including employment, housing prices, crime rate, weather, access to health care, and total household income.
Ottawa may sometimes get knocked for being a bit on the staid side compared with metropolises like Montreal, Toronto, and Vancouver, but Canada’s capital placed second only to Calgary among Canada’s largest cities in the MoneySense study. Meanwhile, Montreal ranked 169th, Vancouver ranked 39th, and Toronto ranked 32nd.
Ottawa was the highest-ranked city outside of Alberta, which fielded the top three cities of St. Albert, Calgary and Strathcona County.
Some notable patterns emerged from the 2014 National Association of Realtors Home Buyer and Seller Generational Trends report, which looks at generational differences among recent home buyers and sellers.
The youngest home buyers also happen to be the most optimistic about their purchases, while older buyers are more likely to scale down their properties to match their changing lifestyles.
The youngest crop of adults—known as Millennials or Generation Y, and born between 1980 and 1995—made up the largest group of home buyers, accounting for 31 per cent of recent home purchases. This group was most likely to believe that their purchase is a good financial investment (87 per cent). More than 75 per cent were first-time buyers.
The next-oldest cohort, Generation X (people born between 1965 and 1979), fielded 30 per cent of home buyers. Reasons for buying included the desire to own a home, the need for more space, and job relocation. This group boasted the highest incomes (a median income of close to $100,000), the largest share of married couples, and the greatest likelihood of having children under 18 at home (67 per cent).
Both Gen X-ers and Millennials were most influenced in their choice of neighbourhood by the quality of the neighbourhood, and convenience in relation to their job. Gen X-ers were also concerned about proximity to good schools for their children. Millennials, meanwhile, were predominantly concerned with commuting costs.
Younger Baby Boomers (born between 1955 and 1964) were responsible for 16 per cent of home purchases, and Older Boomers (born between 1946 and 1954) for 14 per cent. Only nine per cent of home buyers came from the Senior Generation, born between 1925 and 1945.
There was considerable variation in terms of the number of years each generation intended to stay in a home before moving on. The Millennials planned to live in a home for 10 years, Gen X-ers for 15, and the Baby Boomers for 20.
The one factor uniting the generations was that everyone from Millennials on up began the home-buying process by going online, and then finding a real estate agent. Three-quarters of the Millennials said the biggest benefit of having an agent was help in understanding the process.
In terms of selling trends, Generation Y fielded the smallest percentage of home sellers, while Gen X had the largest share, at 29 per cent (job relocation and home size were among the chief factors).
Younger Boomers, of whom a third are single, accounted for 21 per cent of recent home sellers. Their most common reasons for selling included the home being too large, the need to relocate for a job, and the neighbourhood being less desirable.
Older Boomers comprised 22 per cent of home sellers; they sold because they wanted to downsize (both in terms of square footage and price of home), to avoid renovations, and to move closer to friends and family. This was the generation most likely to move to another region.
The Senior Generation was responsible for 16 per cent of home sales, and for many of the same reasons as the Boomers, such as downsizing after retirement and moving closer to friends and family. Proximity to health facilities and shopping were also strong factors.
Around a fifth of the members of the Younger Boomers and the Senior Generation purchased multigenerational homes. This was either to accommodate children over 18 moving back home, or to facilitate caregiving to aging parents.
The full report can be found on the National Association of Realtors’ website at http://www.realtor.org/reports/home.