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Oasis Realty Brokerage, Ottawa Real Estate
Gord McCormick Ottawa, ON K2S0H6
Cell: 613-371-9691
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Has the bleeding stopped in real estate?


Lowest number of sales in a first quarter in 9 years!
As expected, March 2023 results paled by comparison versus those of the market peak in 2022, with the number of sales transactions again down almost 40% and prices down over $140,000 (-17%) for residential properties sold and $60,735 (-13%) for the average condo.  In 2023 is takes approximately 3 times longer to sell a property than it did a year ago.  Cumulative days on market is 58 days (vs 18 last year) for a residential property and 62 days vs 23 for a condo.

By the number of sales during the first quarter, this is the worst sales year in 9 years, since the dark days of the Harper Conservative government. You have to go all the way back to the first quarter of 2014 to find a period with a slower number of sales and that only marginally so. (2,645 sales in Q1 2014 vs 2,651 in 2023)

Glass half full?
On the plus side, prices have been fairly stable for the last 60-90 days and remain trading very similar to prices in early 2021.

The Bank of Canada did not hike the central bank rate in March and mortgage rates have actually decreased slightly in recent weeks (though it is not unusual for Bank competition to do this, leading in to the peak selling season of April-June)

The sales to new listings ratio in recent months continues to show a solid “balanced” market which typically favours neither buyers nor sellers.

Corporate realtors, association groups and the most heard or seen marketeer Realtors, all point to an ongoing supply issue and an inevitable return to an unbalanced sellers’ market with limited supply.  Hence, “buy the dip” tends to be the suggestion, as this new sellers' market is happening any day...so buy or list soon!  Though there may be reason to believe we may continue to have a supply shortage relative to immigration, household formations and population growth, it remains to be seen how soon that manifests itself in to a return to surging growth in the number of sales. (and we have a long way to surge, to get back to a more normal level of sales)

Has the market “turned”?
There is clearly a sense that market activity is “picking up” that buyers have now “normalized” the higher mortgage rates, that the Bank of Canada rate pause is helping get buyers “off the sidelines”  and that all will soon be well with the good ship real estate.  The return of (some) multiple offer activity is also often referenced.

It is certainly true that “activity” is picking up, as normally does every spring, what remains to be seen is the relative level of growth in sales levels, which would be indicative of an improving market.

Unfortunately, the level of new listings is below both last year (by 21%) and the 5 year average (-15.6%) so it is difficult to see significantly higher sales levels, without accompanying volume of new listings.

On hand inventory level has improved vastly, compared to last year’s ultra-low numbers and was almost double at the end of March 2023 vs 2022.  We believe that many current homeowners remain on the sidelines that might otherwise consider a sale, due to mortgage rates and overall price levels.

New Construction:
Starting last spring , builders have had a tough time and “sales fell off a cliff” (we believe by 60% or more, based on some reports)  and typical list prices now are approximately $75-$100K (or more!) off last year’s price. Other inducements have also been added and buyer activity also seems to be “turning the corner”.  Most builders have some pockets with good inventory levels of quick occupancy homes that buyers can consider, so that is a plus for buyers.

Expectations:
Both buyers and sellers in this market will want to check their expectations and not sabotage their chances of getting a deal done (or a lengthy search or listing period)

We see in many cases that sellers are stuck believing in 2022 selling prices and some buyers have adopted an overly aggressive approach to negotiating a purchase price. 

So it is a good idea for sellers to assess whether they would want to sell at 10% or 15% lower than what they thought might have been the case last year.  Also, researching sales prices in their specific area in 2021 might also give an indication of what to expect from the current market.

 

Gord McCormick, Broker of Record

Oasis Realty Brokerage  613-435-4692 or 613-371-9691

 


3% listing fees for 2023


If you are thinking of selling your residential property anywhere in the Ottawa area this year, we offer a listing fee package at 3% or 3.5% for full service MLS listings on realtor.ca that saves most 1-2%, translatiing in to thousands of dollars in savings or increased equity to apply to your next property purchase..  

Also, ask us how we managed to sell a number of properties last year for only 2% total listing fee!. 

We have been servicing buyers and sellers within 60 minutes of Ottawa, as both your City and Country Brokers. 

Please give us a call...it's your money you'll be saving!

 

Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage  613-435-4692 or 613-371-9691
oasisrealty@rogers.com 

*not intended to sollcit those working with another Realtor.

 


Chilly January 2023 in Ottawa real estate


January 2023 sales results continued right where 2022 left off, though there is some good news!

The number of sales transactions was down 35% from January 2022, led by residential sales which were down 30.1% and condo sales which lagged 46.9% vs the same month last year.

Are prices stabilizing?
Residential:
The average selling price in January for a residential property was actually up a little from December but down 12% vs a year ago and down 20.5% from our peak residential price in March 2022. That $853,615 price we may not see for some time, as January’s average selling price was $676,272, a whopping drop of $177,343
Condo:
The average selling price of a condo in January was $412,244, down 8% from last January and down 14% ($67,161) from last March peak selling price of $479,405.  This average selling price was also down vs December 2022 average selling price of $434,973, so the condo price may not yet have flattened out.

Listing inventory:
Good news on several fronts with listing inventory.  The number of new listings was up from last year and the 5 year average but not significantly.  Even though sales were off, we still managed a sales to new listing ratio, which keeps us in “balanced” market territory. (vs either a “buyers” or “seller’s” market)
Also, available inventory at month end almost tripled vs January 2022 but this just gets us back to more typical listing inventory levels, where 2022’s listing scarcity helped push prices to their highest point early last year.
This is probably the key area to watch in coming months, as we move towards what is typically the peak spring market and government “moving” season.  If the number of available listings explode, then we could see additional downward pressure on prices as supply and demand would then be unbalanced in favour of buyers.  May is typically the # 1 sales month, followed by June and April.

Days-on-market:
Not surprisingly, it is taking longer to sell a property than it did in early 2022 and the monthly stats show that this time period has doubled vs January a year ago.  The average residential property took 43 days to sell in January vs 20 days last year.
The average condo sold in 47 days vs 26 days in January 2022.

Rental market:
Rentals continue to be a bull market, with rental listing inventory on hand up 27% vs a year ago and units rented in January increased by 24% over last January.  Realtors have more than doubled the number of units rented on behalf of investor clients in just the last 3 years, reflecting the additional % of housing stock owned by investors or absentee owners.

What to expect:
With peak prices experienced last February and March, we can expect the next few months price results to look pretty awful, but we think the worst of the price drop has now been experienced, as we are approx. 20% off last year’s peak prices and roughly in line where price were early in 2021. We would think average prices should be pretty consistent and relatively flat.  Hard to see sales levels improve significantly, given the relatively higher mortgage rates.


Rate hikes continue to batter real estate in October


Ottawa sales drop 41% during month of October:

The number of sales transactions fell 41% during the month of October vs 2021, as continuing mortgage rate increases continue to keep buyers on the sidelines, especially first time buyers and investors.  We are not alone, of course, as similar pain is being felt in most real estate markets.  Montreal was down 35% in October, Vancouver 45.5% and Toronto 49%.

On a year to date basis in Ottawa, the number of overall transactions is down 22% for residential properties and 17.9% for condos.

Average residential selling price tanks 20.6% since March:

From our peak selling prices back in March of this year, the average selling price in October has plummeted $175,742 or 20.6%.  The average condo is down $71,457 (14.9%)  These price drops are unprecedented in Ottawa sales history. (as was the price run up from mid-2020 until March of this year)

 

Residential listing inventory doubles: (not such a bad thing!)

The amount of residential listing inventory available for sale was 97.2% higher at the end of October this year than at the end of October 2021.  Condo inventory was up 38.4%. 

This inventory growth is not a result of a huge influx of new listings but more a factor of the unit sales decline and a return to more normal inventory levels.  Inventory supply levels a year ago where uncharacteristically low, which helped drive prices higher with the high demand and much lower mortgage levels.

 

Balanced market vs buyer’s market?

We have been in the middle of the “balanced” market range for several months, according to the sales to new listings ratio. In October, this ratio came in at 48.2% based on 987 and 2047 new listing.  A balanced market is said to exist when this ratio is between 40-60%.  So October 22 results indicate we are in a balanced market vs the runaway sellers’ market that existed a year ago, when the same ratio was 85.6%.

The current 7 day ratio (as of Nov 4th, 2022) works out to only 35.4% which would suggest a buyer’s market (anything below 40%), so this is a metric worth watching, as sales continue to dwindle and we also enter the seasonal sales dip which normally occurs mid to late November to mid-February, when activity normally starts to revive ahead of the spring market.

Now is the time to start planning your 2023 sale or purchase:

Late fall is a great time to have a discussion about buying and selling objectives and feasibility.  We are happy to research your individual circumstances and make some recommendations on listing prep and selling expectations.  Feel free to give us a call at 613-435-4692 or 513-371-9691

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

 

 

 


Still a “balanced” market but why does it feel like a “buyer’s market?


August sales results for Ottawa real estate continued the downward trend in sales transactions and prices.  Sales transactions fell by 27.3% compared to August 2021 and were 29% lower than the 5 year average.

Selling prices: still trending south

Average selling prices for the month $635,585 (residential and condo combined) were actually up (by 5%) vs August 2021 but were down $10,068 vs July and 16.06% lower than our peak average sales month in March 2022 where the average price rang in at $757,225.  (that’s a drop of $121.640 over the last 5 months or almost $25K/month)

Listing inventory:  “starting to pile up?

New listings were up by 7% for the month, so not a huge bump-though let’s wait to see what things look like in this department after the “busy Fall season” kicks off it with its annual listing surge, post Labour Day. 

Total available listings at month end in August, despite the modest increase in number of new listings, tallied up to residential listings being 64.4% higher than a year ago and condo listings being up 19.5%.

If the sharply downward sales (transaction) trend continues and listing inventory continues to pile up, then we can expect further downward pressure on prices.

Sales to new listing ratio:  solidly “balanced” for the month of August

New listings during the month were 2093 and sales were 1137, so the ratio between the two tallies up to 54.3%, which is solidly in the middle of the “balanced” market range. 40-60% is balanced, above 60% is sellers’ market and below 40% is buyers’ market.

New Home sales: 

we don’t have any access to new home sales figures by builders but one suspects they have to be even more challenged than the resale market, as uncertainty about financing rates and delivery dates and ability to sell an existing property, must all be weighing heavily on many new home buyers.  Many current sellers are also sweating out a sale of an existing home and finding out firsthand how much the market has changed from when they made their buying decision on the new build.

Bottom Line:

We prefer not to be in the prediction business, but reading these tea leaves, it is hard not to see another tough few quarters in Ottawa real estate.  Let us just hope that the current spending happy Federal Government does not decide that now is the time for some fiscal restraint.  Some opportunities out there for buyers, though…especially those without a property to sell.


Sales and prices continue to tumble in July 2022


RIP Sellers’ market!

There is no question the runaway sellers’ market is over.  The big question is: will we hang on to a “balanced” market (roughly even number of buyers and sellers) or will we decline further in to a “buyers’ market?  (More sellers, fewer buyers)

July results will be published this week and we can expect to the number of sales down by at least 20-25% from July last year and average selling prices have now pulled back to 2021 levels, which is indicative of a $100,000 average price drop, since our peak in February or March of this year.  That’s about a 14% decrease.

This, unfortunately, has caught many sellers in the unenviable position of having to significantly adjust  expectations for what they will get for their existing property and also perhaps, how long it will take it to sell.  We are seeing instances where some buyers have not been able to close on their purchase, because they could not sell an existing property or obtain revised financing approval, due to a shortfall in proceeds from an existing home.

Other characteristics of the current market include a high number of listing cancellations, sales falling through, increasing use of conditions in buyer offers and a significant number of price decreases. (in some weeks, 10% or more of current listings have been taking “markdowns” to try to get an offer/deal.

Our low commission model makes even more sense to many sellers in this market, as the 1-2% (perhaps more) savings* in commission and HST can help make the difference.  *vs typical 4.5% to 5% fees charged by many Realtors.  One recent seller actually saved $24,069 in commission and HST (vs a 5% commission fee) and another $16,498  by working with us.

Give us a call if you would like to discuss your situation, (not intended to solicit clients of other Realtors)

613-435-4692

 

Gord McCormick, Broker of Record
Oasis Realty Brokerage  oasisrealty@rogers.com

Experienced service for less!


Slow sales again in May 2022


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.

 


Sales slump continues in to first week of May 2022


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