“August was a record month in terms of the number of home sales, but we have to caution that prices remain flat—though they haven’t gone down—and it’s taking a lot longer to sell,” observes Patrick Morris. “When you look at the stats, the price ranges selling are much lower than what we expected, with the most popular being the $300,000 to $400,000 range. That has been a consistent pattern all year.”
Members of the Ottawa Real Estate Board sold 1,484 properties in the month of August 2016, compared with 1,267 sales in August 2015—a staggering 16.3 per cent increase. Patrick attributes the surge to “pent-up demand.”
When buyers returned in August and the market went gangbusters, the rise in demand predominated in the $300,000 to $400,000 range for residential properties—which accounted for more than a third of home sales so far this year—and the $200,000 to $300,000 range for condominium properties. Given how sluggish condo sales have been over the past couple of years, says Patrick, “We’re very pleased about that.”
Although the average sale price for residential properties and condos year to date (to August 31) remains almost the same as it was last year, the number of sales is up by about 6.7 per cent for residential properties and 5.8 per cent for condos. Whereas in 2015, 8,655 residential properties were sold from January to the end of August, in 2016 that figure rose to 9,234. Condo sales for the same period rose from 1,910 in 2015 to 2,020 in 2016.
However, it is taking considerably longer to sell properties this year.
In 2015, it took on average 62 cumulative days on market to sell a residential property. This year, it’s taking nearly one third longer to sell, at 83 days on the market. The same is true for condos; year to date, the average cumulative days on market is 106 in 2016, compared with 82 days last year.
Why is this happening?
“Buyers are taking their time making decisions,” explains Patrick. “The number of properties on the market has decreased—the inventory is much lower than it was a year ago at this time—so buyers are being selective. They’re taking a lot more time to do their research compared with previous years, which is a good thing, so that when they do see the right property, they are able to make an informed decision.”
Patrick anticipates that the trend of stable prices and lengthier selling times is going to persist over the next few months.
“Unlike some Canadian cities, where properties sell quickly and prices continue to rise, our region has a stable housing market. We don’t witness monumental price increases or declines. I think we’re going to have a steady market between now and the end of the year.”