Prices still up strongly in August but gains diminishing:
August was another interesting month in Ottawa area reale state, as sales stuggled to keep pace with the 5 year average and trended behind unit sales two years ago. For the 5th straight month, average selling prices decreased from the peak back at the end of March.
For example, the average residential sellling price in March this year was a lofty $758,802, a 35% increase over March 2020. Similarly, the average condo sold for $437,041 up 18%.
By contrast, August residential sales had tapered to $674,449, a difference of $84,353 or 11.1%, over those 5 months. Condo average selling prices dropped from $437,041 in March, to $407,148 in August, a decrease of 6.8%.
Notheless, the average selling prices this year to date are up 27% for residential properties to $722,526 and condos are up 18% to $420,654, though as noted above the trendline is clearly heading in a southerly direction over the last 5 months.
Sales suffer from "what do I buy?" and sticker shock issues:
We believe many buyers are on the sidelines, despite still low interest rates, due to the huge price leaps over the last 2 years. (19.8% increase in 2020 and more this year)
Those with existing homes to sell, have a double issue: first, how can they be sure of what their current home may now fetch on the market and what will they have to pay to for the type of property they would consider buying. We believe these impacts are what is stalling sales and even builders seem to have not as easy a time of it, over the last couple of months. Those buying a new home with a closing date a year or more out, have only their crystal ball to determine, what type of market we may be experiencing then and how long and for how much their current home may sell.
Listing inventory: Listing inventory is pretty flat vs 2020 but with fewer new listings coming out and sales softening, that is probably a good thing. New listings to sales ratio, however, is still indicative of sellers market conditions overall, which is somewhat confusing, considering the slowing sales and decreasing prices
We are seeing many, many more conditional sales vs straight out, no inspection-no financing sales that had been the norm for 18 months. Though there are still a goodly number of firm no condition sales, it is becoming much more balanced.
Sellers particularly, will really have to check their expectations and take what the market will give them over the next few months, as the red hot sellers, market shows signs of easing.