Sales dip again in May, prices up from 2021 but also slowing

The number of sales transactions in May slumped  -19.2% vs May 2021 and are now down 13% on a year to date basis, reflecting diminishing demand, as our sellers’ market wanes.

Prices ease from March highs:

Average selling prices have also pulled back from their highs in March this year with the average residential selling price 7.1% lower than March ($802,393 vs $853,615 in March 2022) Prices are still strong vs 2021 however, with the average  selling price in May up 8.2% for residential properties and 16.3% for condos.

Inventory still low…but…:

While overall listing inventory is still relatively low by historical standards, we did see a bit of an increase in available listings at month’s end, where we had 18.1% more residential listings than a year ago.  Condos were fairly New listings were pretty flat vs last year but if the rate of sale continues to ease, then listing levels could well soon arrive in “balanced market” territory.

What does it mean for buyers and sellers?

Sellers really want to be on top of day to day conditions and also have a detailed discussion with their listing agent about listing strategies, as we are noticing a shift in what has been the tried and true “holding offers” playbook.  With possibly fewer buyers for each listing, the successful practices of the last couple of years may not be as successful.

Buyers may find some good opportunities on listings where a seller has already bought another property and may have some flexibility on their list price to get a deal done.  Buyers should not however assume “fire sale” pricing, as prices tend to be a little “sticky” in most cases.

Check it out before it goes on MLS/realtor.ca   3+1 bedroom, 3.5 bath semi-detached with finished basement, parking for 4-5 cars, large 2nd floor family room for work-at-home applications, fenced rear yard with deck, extensive interlock and a super central location near Merivale Rd and Baseline Rd.  Virtual interactive iGuide tour and floorplans at the link:  https://youriguide.com/126_whitestone_dr_ottawa_on/

Unofficial numbers estimated at our office, suggest the sales drop that occurred both in Ottawa (-21% fewer transactions vs 2021) and across the country in April,  has continued in the first week of May with Ottawa sales falling 16.8% behind last May’s first week and 25% lower than 2019.

The combination of price levels and higher mortgage rates, each play a role plus some intangibles like buyer fatigue and uncertainty about future market conditions, are also perhaps factors.

We had previously noted that new mortgage advanced for first time buyers was off significantly, even last December, so if this trend has continued, it is also playing a role.

All this a time when it seems every politician running is promising to “do something to fix housing”.  So stay tuned over the next 12-18 months, to see what further government “fixes” are being applied to a market that may already be correcting.

Price levels continue at a high level but are not as strong as they were in February this year when the average residential selling price was $853,615 and for the month of April this had eased to $829,318 or 2.8%.  Residential prices are still higher year to date by 12.8%

Listing inventory remains low, though there was a slight increase in residential listing inventory at the end of April (9.8%)  New listings in April, however, were down 12.8% vs April 2021.

It certainly appears that the fire is dampening in the hot real estate market, so buyers and sellers will have to be cognizant that conditions on the ground, may be different than what they had based their plans upon and be prepared to adapt to up to the moment market conditions.

What’s next?

The spring season is critically important to our real estate year here in Ottawa, with May as typically the busiest sales month of the year, followed by June and then April.  While there is still time for the market to score gains, before the summer sales plateau, it looks like real estate may be in for a bumpy ride.

Hope we’re wrong on this but all signs seem to be pointing in this direction.

Give us a call to discuss your own particular situation and save big on our optional 3% commission fee for a full service MLS listing on www.realtor.ca (not intended to solicit those working with other Real Estate professionals)

Gord McCormick, Broker of Record

613-371-9691 mobile/text  email: oasisrealty@rogers.com

As you can see from the new weekly listings line in green above, new listings typically tank, going in to a long weekend and surge, following that long weekend.  The rationale for this, is that many buyers (and sellers and Realtors) have other things to do on those long weekends.  

As of this morning (April 26th, listings show 913 new listings over the last 7 days vs approximately 600 the week before Easter)

Market still showing somewhat surprising price growth but we feel demand is not as deep as it has been.  We believe there are fewer showings, offers, relative to only a couple of months ago.

Signs include:

-a fair number of properties not selling on "offer day" and coming back out on the market with a price increase, more accurately reflecting the price a seller was hoping to achieve.

-we are also seeing a reasonable number of price decreases, after only a week or two on the market, as sellers may be revising their expectations or feeling motivated by the fact that they have already bought something else and the clock is ticking.

-many buyers have been rushing to get deals done and preserve a "rate hold" on a favourable mortgage, given the upward direction of rates.  Also, many first time buyers have been priced out of the market and some mortgage numbers have indicated a decrease in the number and mortgage volume of first time buyers.

-more listing agents opting to consider a "pre-emptive"  or "bully" offer than we may have seen 6 months ago and some not "holding offers" at all.

-sales to new listings ratio over the last week is 547/913 or 59.9% which is bordering on a "balanced market" (40-60%) where we have been up in the 70's, 80's and even 90's, for some time.  This is only one week of course, and we cannot totally discount the effect of the listing drop before the weekend and the corresponding sales figures.

May is normally the busiest sales month, though last year we peaked in late April, so we'll see how this year unfolds.  One factor that is impossible to assess is how Federal Government employee relocations will be affected by the new "work-at-home" reality.  New fiscal year kicks off in April and we generally see a surge of listings from outbound military and RCMP. May brings the peak of inbound employees, shopping to buy.  Will more choose to rent, if their career stop here is only 2 or 3 years?

...time will tell!

Let us know if we can assist with any real estate matter you may be considering,

regards,

Gord McCormick and Dawn Davey 
Broker of Record        Broker
Oasis Realty Brokerage  613-435-4692 or 613-371-9691

Ottawa real estate results for January, show strong sales, despite significant listing inventory shortages.  Board members chalked up 936 sales in January which is tradionally the 2nd lowest sales month. (December is the lowest)  

The inventory shortages pushed prices up significantly, yet again, with the average residential property selling for $771,739 up 14% and the average condo was up 18% at $447,943. 

Listing inventory at month's end was only 827 units, less than one month's sales...so the supply/demand problem is not going away anytime soon.  New listings were also modest during the month.

Another area of the report indicated that rental units rented by Realtors during the month jumped 23% from 333 units to 410 units.

Should you have any questions about real estate plans for this year, please do not hesitate to call 613-435-4692 or 613-371-9691

Gord McCormick, Broker of Record

Oasis Realty Brokerage  oasisrealty@rogers.com 

https://creastats.crea.ca/en-CA/

Ottawa real estate recorded a solid month of sales in October, despite continuing listing inventory challenges. Though unit sales were down from the unusual sales pattern in 2020, where Fall was our strongest season, 2021 recorded unit sales 4.5% higher than October 2019 and average prices rose higher than those recorded this September.

Year to date average selling prices:
Residential: $720,150  +24.4%
Condo:         $419,515  +16%
Listing inventory at month end:
Residential: 1,285  -2.1%  vs 2020 and -46.5% vs 2019
Condo:            491  -19.4%  vs 2020 and -6.8% vs 2019

Given these figures, along with new listing numbers that are down from 2020…it certainly appears that there is no trend for more homeowners to list their properties for sale and even out supply and demand.  Therefore, we can expect continuing upward price pressure on those properties that do make it to the market.
Realtor rentals are the hottest sector:
Ottawa Realtors have recorded a 41.8% increase in year to date rental transactions to 4,012 for the year to date, almost matching the number of condo sales.  If you have any questions about how we can provide valuable assistance. with either finding a tenant for a rental property or helping a tenant find an MLS® listed property, give us (or your agent!) a call. 613-435-4692 or email oasisrealty@rogers.com
Outlook:
The spectre of higher mortgage rates may push some buyers to try and get a deal done now, while at the same time deterring other buyers from getting in to the market.  Pending changes at the Federal level on incentives for first time buyers may also stall some buyer plans, until the Government finalizes these particular election promises.
The Ottawa market and economy looks strong, given recent employment numbers but of course, a minority government, always provides a certain amount of uncertainty, given the swings possible with a change in government.
We believe that the incredible run up in prices (over 50% over the last 3 years) has had a significant impact on keeping homeowners “put” and will continue to do so and price increases will moderate.