Ottawa real estate: residential average selling prices in negative territory in October 2014

Published 19 November 14 10:44 AM | Gord McCormick 

Ottawa real estate residential prices showed a 3.2 % decrease in the average price of properties sold in October, compared to Oct 2013.  While one month does not make a trend, it is only the 2nd time this year that average selling prices in a month have been lower than the previous year. (the other month was July)  Quite likely the weight of listing inventory fuelled the price drop, as many sellers chose to compromise on price to get deals done.  This helped push the # of unit sales up slightly for residential homes by 5.6% for the month, although MLS® condo unit sales were down 8.1%.


Listing inventory, competition and seller motivation:

The principal reasons for the resale average price decrease is that excess listing inventory and builder incentives are creating significant competitive pressure on sellers.  Residential listing inventory at the end of October remains 36.1% higher than the 5 year average and condo inventory is 62.7% higher. (vs end Oct 2009-2013)

Another statistic that clearly emphasizes the problem is that residential listing inventory is almost exactly double what it was at the end of Oct 2009 when we had a seller’s market (average prices increased 13.3% during that month!) and a comparable level of unit sales. This is almost 3,000 more listings now than then!


Sellers with a high selling motivation or who had been listed for an extended period most likely made price concessions to secure deals before the slower winter selling season.  (Nov-Feb are the 4 slowest months of the year in Ottawa real estate with unit sales 50%-66.6% lower than the peak selling months in the spring and summer.


What can we expect this winter?

With the current listing inventory excess, we would expect to see a strongly competitive market, unless sellers quit the market en masse to relist in the spring which is unlikely to happen.  Our expectation is that prices will stay flat or in slightly negative territory as sellers compete for available buyers.  This should also continue to maintain unit sales levels in positive territory.


On the plus side:

Underlying demand and activity seems pretty solid and it would only take a few hundred extra sales monthly which would turn those sellers in to buyers and thus push the whole market in to more positive territory.

We are hoping that the Federal Government eases budget restraints somewhat in the coming election year and personnel relocations (especially DND) can return to more historical levels.


What we see from the “inside”:

Our real estate market has been slowly changing over the last two years from what was a long time “seller’s market” to what can now be described as more of a “buyer’s market”.  Many homeowners and ultimately sellers have been surprised and disappointed by their current market listing experience and the length of time it is taking to find a buyer.  The single most common issue is overpricing for this market.  Many factors cause this over pricing and we have noted a few of these in a couple of recent blogposts:



We are happy to discuss your 2015 plans for buying and selling if you are not already working with another real estate professional.  It is never too early to plan and prepare for success!


Gord McCormick, Broker of Record

Dawn Davey, Broker

Oasis Realty Brokerage



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* not intended to solicit those with existing representation agreements

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