Sales results continued to be strong in October real estate here in Ottawa but is there some change in the air? Anecdotally, many agents seem to believe the market is easing slightly, though you would never really know it from the sales increases and average price hikes that are happening.

There is however, one key indicator that suggests we may be on the cusp of a market supply/demand adjustment towards a more balanced market.  For the last 3 months we have seen significant % increases in the number of new listings being published, something that we have not seen for the last 4 or 5 years.  Should this continue and sales slow down, we might then start to accumulate listing inventory and have a more balanced level of supply and demand, especially in the condo market which is already on the verge of turning in to a balanced market (vs a Sellers' market)

Here are the details on a  record setting October:  http://blog.oasisrealtyottawa.com/

Tamarack homes is selling off the last model home in the sold out Poole Creek development in North Stittsville.  This "Dover" model home is one of their flagship homes and this one is loaded with upgrades and premiums on a 50' lot.

4+1 bedroom, 4 baths, gourmet kitchen with high end appliances and island, main floor den, extensive flooring upgrades throughout, finished basement, southeast facing backyard. 

Now available at a reduced price of only $899,000!  Available for mid February delivery 2021.

1870 Maplegrove Rd. MLS 1217262 for more details or give us a call at 613-435-4692.

Total sales top $1 Billion for July 2020, in busiest sales month this year!

 After a pandemic pause in April and May, when unit sales dropped off 55% and 44% respectively, the Ottawa market roared back up in June and July fetched record sales and price levels.  Listing inventory at the end of July is down 51% vs a year ago and this contributed to the price escalations noted below.

The Ottawa Real Estate Board (OREB) noted in their release last week that 57% of properties sold in July, were sold above listing price and therefore, mostly likely with multiple offers/bidding wars.  Nice spot for sellers to be but not much fun for buyers.

Monthly sales top $1.0 Billion:
The total $ value of all sales for the month was almost $1.2 B, reaching the billion $ plateau for the 2^nd time this year.  June also topped the billion $ level at $1.1 B (last year this was only recorded once, during the busiest month of May)  May is typically the #1 sales month and June #2 but that has been pushed back this year, due to the pandemic pause in April and May. July sales typically drop off 20-25% relative to the peak May/June period…but not this year!

Residential prices soared 20.1% to an average price of $585,084 for properties sold during the month.  Condo prices were an equally impressive 19.4% ahead at an average selling price of $357,764.  Not surprisingly, properties are selling very quickly, too with an average days-on-market (DOM) of only 22 days for residential properties and 16 days for condos.

Inventory news:
Residential property listings were down 55.2% at month end, compared to a year ago and the number of condos available for sale was down 37.3%.  This listing scarcity creates the supply/demand imbalance and the sellers’ market which leads to the record price increases. 

Other contributing factors include the amazingly low mortgage rates and also the fact that more properties are being sold in the “grey” market, without getting posted on the full MLS® system at www.realtor.ca.  If you have seen those “exclusive listing” or “Coming soon” tags on real estate “For Sale” signs, these may be examples of properties sold prior to a full-fledged listing.  There are pros and cons to this listing strategy but by all means discuss it with your listing agent or buyer representative for advice, given your individual circumstances.

New listings:  a bit of good news!
While new residential listings during the month were still flat with last year, at least they were not in negative territory, as they have been most months in recent memory.  On the condo side, new listings jumped 20.8% vs 2019 which may be a result of investor owners or Airbnb owners deciding to cash out, given the pandemic induced issues.

Be careful out there!
While open houses are now allowed, subject to certain conditions, we expect most Realtors will sensibly not be conducting them, until the pandemic is over.   Like the handshake, will open houses ever return? We encourage all buyers, sellers and fellow Realtors to exercise the utmost caution in visiting properties and follow all requested protocols for showings.  We have heard anecdotal reports of buyers and their buyer representatives not wearing masks or sanitizing their hands prior to entering a property showing.  On top of the obvious health risks, buyer representatives could face disciplinary action, including fines and buyers should be aware that a listing condition which includes a COVID-19 protocol is a legal requirement, so not following that requirement might even result in legal action. 

Home buyers and their agents should also be aware that they never know who is watching when they visit a listed property, with showings often only booked for 30 minutes duration these days, many sellers simply go to a neighbours or park down the street while the showing is underway. Our own practice has been to bring our own PPE (though most listings also provide it) and ensure that both our clients and ourselves sanitize outside prior to entering a home, so if anyone is watching, they can feel comfortable that we will dutifully follow the COVID protocol in place.

Ottawa home buyers really warmed up in the 2^nd week of June when sales roughly equalled those of a year ago, for the first time since late March.  Unit sales had been off 55% in April and 44% in May but June appears to be trending much closer to last year’s results.

Listing activity is up too but most new listings are being sold quickly, so the extreme listing inventory situation continues.  This means lots of offer dates, pre-emptive or “bully” offers and prices escalating.  Most real estate markets in Canada are reporting similar circumstances, despite CMHC’s prediction of a 9-18% price decrease over the next 12-18 months.

To no one’s surprise, real estate activity dropped significantly in April as the world grappled with COVID-19.  While real estate and many related services were deemed “essential” in Ontario, only those with significant need to buy or sell were in the market in April.  Here are some highlights from recently released statistics:

April sales plunge 55%
While March sales had been strong, with skyrocketing prices in our inventory challenged sellers’ market, there were already indications that April would be a whole new ball game.  Showing Time® which is a 3^rd party software and services organization that our Board uses to schedule and manage property showings, reported an 81.1% drop in showing activity across Ontario between March 12^th and March 30^th.  Not surprisingly, this drop-off in showing activity was followed by unit sales in April which plunged 56% for residential properties and 51% for condos.

Average selling prices rise 6%+
The average residential selling price during April was up 6.8% to $521,694 and the average condo sold for $321,813. (up 6.3%)  If this seems to be a bit of a surprise, given the relative lack of overall sales, it can probably be explained by the level and prices of available supply.

New listings and total inventory still very low:
New listings also showed a dramatic decrease during April of 57.3% mirroring the lack of sales.  This can perhaps be considered a bit of a silver lining, as it keeps the diminished demand in some balance with supply.  One key statistic industry watchers consider is the sales to new listing ratio.  In April, this ratio was still a healthy 76% which normally would be indicative of a sellers’ market. So there are still a lot of serious buyers relative to the number of listings available. Month end listing inventory is 48% lower than a year ago.

Most military moves on hold:
An important activity in our spring market is the onset of military and other Federal government moves, corresponding with the new government fiscal year in April.  Only the most mission critical of these moves are happening and most have been delayed.  Though our Board is not able to keep stats on this portion of our market, from our analysis of April sales, it would appear that as much as 20% of our sales shortfall could be attributed to stalled government moves.  These may occur later or throughout the year but it will also have a negative effect on both May and June sales, as this is when most of these purchases and sales for those posted to or from Ottawa occur.

How will the rest of the spring play out?
May is typically the # 1 sales month and June is typically #2. (April is 3^rd)  Assuming a continuation of existing conditions, it is hard to see May sales surpass those recorded in March this year.

Will prices be dropping?
A lot of buyers may be thinking that prices are bound to drop and while they are certainly likely to plateau somewhat, history shows that there is little chance of a significant drop in overall average price levels. In the history of the Ottawa Real Estate Board, average selling prices over the course of a full year have only decreased 4 times (1961, 1962, 1995,1996) and the largest of those annual decreases was in 1961 at the height of the Cuban Missile Crisis. 

What is generally more likely to happen if the economic fallout from C-19 is extended, is that real estate just totally stagnates and few choose to either buy or sell.  This was the situation in the 1990’s which resulted in years of moribund sales activity, prices that weren’t advancing and a huge decline in the number of real estate agents.  Ottawa started the 1990’s with somewhere around 2,800 Board members and that number was down to 1,300 by the middle of the decade.  It actually took until 2009 before the Board reached that 2,800 membership number again.

The average selling price during the whole decade of the 1990’s only increased by a total of 8.9% over the decade or less than 1% per year.
It is true that prices tend to follow sales and inventory level trends and with sales and new listings falling in tandem, thus far there is price support, though sellers should not be overly aggressive with their price expectations.  Surprisingly, we are still seeing a fair number of multiple offer situations but far, far fewer than was the case prior to mid-March.

Buying and selling in the same market:
The good news-bad news about the market “pivot” (as the Board calls it) is that those who choose to both buy and sell right now, are doing so under the same market conditions. 

New construction:
Most builders are still actively completing homes that are under construction, though there are many delays in possession dates.  Builders have closed their sales centres and model homes but like Realtors are going to considerable lengths to accommodate buyers and sustain business by whatever means they can and we continue to see new lot releases and promotions.  No statistics available to gauge builder sales results but it would make sense that is somewhat similar to the resale market.

Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage
613-435-4692 oasisrealty@rogers.com

www.oasisrealtyottawa.com

Gord McCormick of Oasis Realty helped us sell and buy our homes six years ago.  Our experience working with Gord, both as seller and buyer was great.  So when leaving Ottawa meant it was time to sell again our first choice for realtor was Gord McCormick.

Gord did not disappoint.  He gave generously of his time and in-depth knowledge as we prepared to sell.  Then he carried out a marketing strategy that was a perfect fit for the market.  Having received multiple offers, our home sold over list price with no conditions within the first week.  To have such a successful conclusion in such a short time was the best of all worlds.

Gord is a true professional that puts the best interests of his clients first.  He has a consultative style and is always tactful, never pushy and wise in counsel.  Combined with his most effective marketing strategies, you have a realtor that we can most heartily recommend.

Judy & Kerry

November 2019