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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. 

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.

Check expectations?

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.

Coming out of a very unusual (to say the least!) 2020, Ottawa real estate watchers will want to keep an eye on these critical market indicators:

Listing inventory:
Our residential listing inventory as we start 2021 is down 59.2% from a year ago, which was already down 26.5% from the 2018.  This is the most relevant statistic that translates in to continuing soaring prices, as experienced in 2020 where prices were up approximated 20% for both residential and condo properties.

The inventory shortage in residential properties suggests strong price increases will continue in that category, though the same may not occur with condos that have seen a trend where current listing inventory is above last year’s by 27% at the end of December 2020.  Rental inventory has also surged and is now 38.5% higher than a year ago.

New Listings:
Our strong upward price trend (highest annual increase in 37 years on a % basis in 2020) was driven by the foregoing lack of supply.  This imbalance in supply and demand, along with super low mortgage rates, created the environment for bidding wars and a large % of properties selling over list price.

The number of new listings did increase fairly substantially in the latter half of 2020 but the excess market demand absorbed most of these new listings as demonstrated by the strong monthly sales increases.

New Listings to Sales ratio:
A common indicator of market trend, this ratio compares the number of new listings to sales during a period of time.  If this ratio is less than 40% then we are said to have a buyers’ market.  If the ratio is between 40-60% then “balanced” market conditions are said to exist. (a roughly equal number of buyers and sellers are in the market)  If the ratio is above 60% then a sellers’ market is happening.  Though this statistic is not directly reported by the Board, we have estimated it to have been 70.2% overall (residential and condo properties) for 2020 but even higher for residential properties.