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 4^th, 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

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.

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!

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.

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