Oasis Realty Brokerage, Ottawa Real Estate
Gord McCormick Ottawa, ON K2S0H6
Phone: 613-435-4692 Mobile: 613-371-9691

Do we have a gap between seller and buyer expectations?

We were doing some analysis for a couple of customers recently and noticed some interesting numbers.  While these may not be conclusive nor the study scientific, (we have no historical comparables on these) we still felt the results of this analysis could be pertinent.
The table below compares the average non condo residential listing prices in several key areas of the city, compared to the average sold prices year to date.  The resulting differential is quite large in many cases: 

Area                                                      housing current # sold avg # sold Gap % of sold
      type list avg listings price 2012    
Westboro, Hintonburg,Glabar all $717,575 185 $557,391 382 $160,184 28.70%
McKeller, Civic, Carlingwood              
Kanata Lakes   singles $683,423 23 $514,910 50 $168,513 32.70%
Kanata all   all $537,934 133 $424,547 401 $113,387 26.70%
Glebe, Ott South, Ott East all $684,450 84 $624,978 203 $63,472 10.15%
Sandy Hill Dow's Lake              
Stonebridge   singles 638,626 39 $604,608 51 $34,018 5.60%
Stittsville     singles $527,841   $453,247   $74,594 16.45%
      all $497,384 136 $415,750   $81,634 19.60%
Greely     singles $659,093 86 569,488 83 $89,605 15.70% 

 * searches and averages provided by  REALTOR® mlxchange system Sept 19, 2012

The first ratio that comes to mind in looking at these numbers is how huge the gap is compared to the fact that across the Ottawa Board, properties tend to sell at 97-98% of list price on average.  This would certainly seem to suggest that there is quite a gap between what buyers have demonstrated an interest in paying and what sellers are currently offering when some gaps are 25%-30% or more.

This would also suggest that the depth of market buyers at the upper end of the market is limited and there will be downward pressure on average prices or more properties going unsold.

A second reference point is that approximately 85% of all properties sold in Ottawa this year have sold for less than $500,000, so it appears there are a lot of listings at the upper end chasing only 5 or 10% of the buyers.  When you get to $750,000 or more, the number of buyers drops to about 3% of the total.

There is no doubt we are in a slowing real estate market and sellers will want to listen carefully to market feedback and not overly rely on expectations, based on previous years more bullish sales environment experience.  Buyers will want to keep a close eye on listed properties to see if any price changes drop some listings in to their price parameters. 

Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage