Good news and bad in Ottawa real estate 2014

Published 08 August 14 09:01 AM | Gord McCormick 
                              

Well in to August and our real estate market has demonstrated a middling performance at best. Transactions and prices are pretty flat compared to previous years in the resale market and the new home market is also flat but is 17% off the 5 year average.

About the only thing that is “up” is the amounting of listing inventory and the amount of time it takes to get a place sold. (PS. For some inexplicable reason, the numbers of real estate sales people continues to grow but that is a matter for another day!)

 

Well that is most of the bad news but who is most affected?

1. those buying new construction with an extending build period, who have little choice but selling in what we are now calling a “buyer’s market”.

2. those who are selling based on previous seller’s market expectations which were mostly the case from 2000-early 2012 when our market started to slow down.

3. those selling who have only been in a home for a short period of time i.e. 3 years or less.

4. those with a newer home selling in an area of new construction, where the builder is still building similar new construction housing with updated features. (9’ceilings, Energy Star®, etc.)

5. those leaving Ottawa for another market may be at a disadvantage, if they are moving to an area where housing is currently stronger such as Toronto, Calgary, Edmonton, and Vancouver.

6. those selling homes that they have extensively renovated and landscaped, as the market typically does not pay back all those costly reno $$, particularly if the homeowner is paying retail for those upgrades.  Newer homes with extensive builder upgrades fit this problem category also.  We have a lovely home in our neighbourhood that has been on the market for over 400 days for primarily this reason.

7. condo resale sellers have a really tough go right now, given the level of listing inventory (+ 79%) and the amount of new construction.

 

There is some good news though:

1. Though the market has been slow it has not dropped dramatically and there is still decent interest by sellers and buyers.  Most sellers are also buyers, so as soon as they are able to get their existing properties sold, they will become buyers.

2. those saving for their first home purchase and those looking to upgrade are not seeing prices rise and putting their “dream home” further out of reach.

3. low mortgage rates prevail, allowing buyers to get their dream home at historically reasonable monthly rates.

4. homeowners are paying off vast amounts on their low rate mortgage principal amounts and thus improving their equity position.

5. buyers will have the upper hand in most cases and should be able to negotiate favourable prices and conditions of sale.  We may even see a rebirth of the “first refusal” buyer offer.

6. we believe that there is a growing level of rental inventory out there and if so, this should help hold the line on rental price increases somewhat for those still saving for their first home.

7. builders have a very competitive market also, so they are offering some very good incentives on new construction homes. 

7. A slower but stable market is probably good news overall, as it means the likelihood of a steep “correction” is much less.  Ottawa is amongst the most stable real estate markets anywhere and still a great place to buy or sell.

 

If we can assist with your buying or selling plans here in Ottawa by all means give us a call.*

*Not intended to solicit those with existing representation agreements

 

Gord McCormick, Broker of Record

Dawn Davey, Broker

Oasis Realty Brokerage

613-435-4692

www.oasisrealtyottawa.com

 


 

 

 

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