Smoking cannabis at home compromises market value and marketability of real estate

how does cannabis smoke affect home sellers?

As Canada starts a brave new world with the legalization of cannabis, we have to remind all property owners about the dangers of residual smoke and its impact on market value.  Here are a few things to think about:

Most buyers aren’t smokers: Only about 20% of adult Canadians smoke tobacco and non-smokers are very sensitive to residual smoking odours and shun properties that exhibit a long term smoking habit.  We have had buyers enter properties for showings or open houses, who immediately turned around and left the property after smelling cigarette smoke.  These non-smokers will be equally not interested in a property with a heavy cannabis smoke residue.

Ambient odour often unknown to owners: As with many other household odours, the degree of smoke smell may be under appreciated or even unknown to those who live there every day, as one gets accustomed to it.

This is why buyers entering a property for the first time should “listen to their nose” upon first entering a property, as this is the best time to detect potentially out of bounds smells.  A damp basement is usually a giveaway from the first moment of entering, for example.  After a few minutes, however, our perception adjusts and the odour is not as prevalent at a cognitive level.

Hard to remove: Long term smoking in a property is not easily or inexpensively remedied and buyers will either walk away completely or very much de-value a potential property, to facilitate the remediation.

Growing personal marijuana: 4 plants per household should not create a major mould worry but will people stop with 4 plants? The “grow op” stigma created over the last few decades will be a tough one to shake and even if legal, we suggest those selling remove any and all plants and materials from their property prior to listing.  Why turn off even one buyer?

Don’t think it is OK to smoke in the garage: Many wisely smoke outdoors but just as many feel that smoking in the garage is OK.  Doesn’t help much with most buyers in our opinion, so smoke outdoors or better yet, not at all.  This applies equally to tobacco and cannabis.

Stigma remains: Hopefully, your neighbours are not big smokers, either-as this may scare away many buyers also.  Though this may fade as legalization moves forward, the stigma attached to cannabis smoke odour will impact sellers and buyers for some time.

Renters and medical marijuana users: These are two legal battlegrounds we can expect to see unfold in the coming months/years with legalization.  This will be an interesting challenge for both investor owners and corporate rental building owners and managers.

Gord McCormick, Broker of Record
Oasis Realty Brokerage
613-435-4692 oasisrealty@rogers.com
Ottawa, Ontario.

 

 

Is Ottawa real estate really as “hot” as everyone thinks it is?

Ottawa real estate has posted solid results over the last 2 years but is it really as “hot” a market as is often portrayed?

Both buyers and sellers should beware of headlines, myths, legends and Realtor marketing which can tend to obscure reality and create unrealistic expectations.

Let’s start with some facts, based on 3rd quarter 2018 results and see how this jibes (or not) with some market perceptions:

Unit sales year to date:
Residential sales are very flat this year with units sold up only* .3% in the first 9 months of the year.  Condo sales meanwhile (though a much smaller #) are up strongly at 15.1%
*There is a school of thought that says the low residential unit sales increase is due to listing inventory limitations and there is some truth in this.

Prices:
The average price of a residential property sold in Ottawa this year is up nicely by 5.2% to $447,427.  The average condo price is up only 2.3% to $278,401.

Good solid numbers but not exactly runaway sellers’ market results, right?  So why is it that if asked, many people would say we are in a “crazy” strong market and everything is selling quickly, with multiple offers and over list price sales?

Headlines and social media:
Clickbait headlines and search word worthy social media posts and videos tend to be as dramatic as possible, so quite often outlier examples ie one house in Barrhaven sold with “xx offers submitted and sold for xx,xxx over listing” tend to over influence the market reality.

Also, quite often, short term results, such as a single month sales report are taken to represent the overall trend which may or may be correct.  Sales or prices for a single month (or even 2) touting a runaway market may not be consistent with longer term results (4 to 6 months or more) and therefore skew buyer and seller thinking.

Realtor Marketing:
Realtor marketing is pervasive and hypes their individual results, focusing on the how many they sell and how quickly and for list price or better.  Again, giving the impression that everything sells in a just a few days on the market (or even before being on the market!) and creating an impression that this is the market norm.  We submit that the overall sales stats refute the common perceptions created by these Realtor marketing posts.  One high level Realtor marketer quoted earlier in the year that more than 50% of their listings were selling in multiple offers &/or over list price.  While this may have been true for a short period, there is no way this is true over the year to date results.  Unfortunately, such marketing claims can mislead consumers. * during that approximate period the Ottawa Board did quote a figure of 20% of properties selling at list price or above for that specific month.  Unfortunately, there does not appear to be an easy way to track this statistic, which is totally bizarre in 2018.

Listing inventory continues to be low:
Listing inventory continues to run much lower than over the last 5 years (currently residential inventory is 16.8% lower than a year ago and condo inventory is 28.2% lower)  These numbers certainly reflect a relatively thin level of supply but if it was truly drastic…wouldn’t the average selling price increases be much higher under typical supply and demand rules?

Builders recording huge sales increases over last 2 years: Part of the growth in the recent market has been a huge uplift in builder and developer sales of new construction housing and condos and only a small portion of these are sold via MLS listings, so this growth is not included in our market statistics.  Most of these new construction buyers also have a property to sell and these properties do eventually get to the public market via an MLS listing, so those pending listings arrive in the resale market 90 to 150 days before the new construction property is due for possession.

Grey market for listings:
There has been a long growing trend towards pre-announcement of listings by Realtors both as a marketing tool and an attempt to get a property sold sooner.  Everyone has seen the “Coming Soon” or “Exclusive Listing” sign toppers in their neighbourhood and these are examples of what we call the “grey market”.  Though an advance notice market may seem like a good idea, we think it takes away from the impetus and proper MLS launch of a listing but if it makes sense to that seller, then of course that is up to them.

Unfortunately, any sales recorded by these “grey market” listings are not captured by MLS and therefore not included in our Ottawa Board statistics, which may distort the overall sales picture. (in fact, it may understate results and average prices)

Summary:
Overall, our market is healthy and lower listing inventory still favours sellers-so this fall and winter should be among the best in many, many years.  One of the tenets of Ottawa real estate is that it is steady and stable without the large peaks and valleys, experienced in some other markets and we are better off for it.

We are in a relatively strong market but not a runaway seller’s market and we would be happy to provide detailed research for buyers and sellers appropriate to their individual situation.

Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage
613-435-4692 or mobile 613-371-9691

oasisrealty@rogers.com

oasisrealtyottawa.com

One of the highest ranked and “liked” real estate pages on facebook:
http://www.facebook.com/pages/Oasis-Realty-Brokerage-Ottawa/209265863918 

 

 

 

 

 

 

 

 

 

 

 

Moving to Ottawa? Some things to know about real estate

Average house prices a relative bargain:
Those moving from the GTA or Vancouver will view overall Ottawa average prices (average residential selling price approx. $447,000) as a real bargain and that would be correct.  Averages are just averages though and price ranges vary considerably across the city and the Ottawa real estate board reporting area. Urban residential price averages in 2018 are in the $600-$900K ranges and topped $1.5 million in Rockcliffe Village.  Prices have been increasing fairly strongly in the last couple of years, and limited listing inventory is a factor.

Geography:
Ottawa is quite spread out east to west along the Ottawa river some 45 km (Carp Rd to Trim) and about half that distance north-south. Dominant features include the Ottawa and Rideau River systems, the Rideau Canal and the “Greenbelt”, all of which have factored in Ottawa’s development. North of the Ottawa river is western Quebec, the Gatineau hills and the city of Gatineau. Realtors must be separately licenced/registered to practice in Quebec, so very few, if any, can provide services on both sides of the Ottawa River.  Average prices are about $100,000 less on the Quebec side, so buyers should determine which province is of most interest from the beginning of their search.

Big difference between urban and suburban living:
Much of Ottawa’s residential growth over the last couple of decades has been at the fringes in the east (Orleans), west (Kanata and Stittsville) and south. (southwest in Barrhaven and southeast in Findlay Creek and Riverside South)  Home prices have increased most in urban areas and this has fostered many condo developments and infill housing development in the highest urban demand areas.  We currently have several of the largest mixed residential urban neighbourhood projects in Ottawa history underway or planned.  These include: Wateridge, LeBreton, Greystone and Zibi plus numerous large (and tall!) condo projects.

High demand urban areas:
Westboro/Wellington West and Carling/Woodroffe area , Hintonburg/Mechanicsville, Civic Hospital, Glebe, Old Ottawa South, Ottawa East, Manor Park, New Edinburgh, Sandy Hill

Students, Students, everywhere!
Ottawa is a big education centre with over 80,000 full time post-secondary students (140,000+ counting part time) at University of Ottawa, Carleton, Algonquin, Cite Collegiale and St. Paul’s.  This demographic has an impact on housing, entertainment, dining and the work force.

Transit oriented:
Ottawa has always been a transit oriented city with commuter ridership % among the highest in North America.  The OC Transpo system has been built on a mix of dedicated transitways (bus only roads) and express bus lanes which connect urban and suburban commuters with the downtown core.

2018 brings Phase 1 of Ottawa’s LRT (Confederation line) which will connect 13 stations over 12.5 KM, including a 2.5KM tunnel underneath the downtown core.  Phase 2 will expand the scope both east, west and south (Trillium Line) by 2023.

This has created a “transit oriented development” focus for city planners and a great deal of activity is planned around LRT transit hubs.

Greenbelt:
When one drives through Ottawa from the downtown towards the suburbs, the city seems to stop and then restart after large swathes of open space.  This was created way back in the day when the original plan was to keep Ottawa within the borders of this “Greenbelt”.  Over time, persuasive developers found a way to build new communities beyond the Greenbelt and this is where much growth has taken place since the 1970’s.

Schools:
We have a gamut of schools at the elementary and high school level encompassing English, French and immersion programs from public, Catholic and French school boards.  The widespread geography of Ottawa has become a bit of a problem in this regard, as demographics have changed school enrollment patterns and many schools are on the “to be closed” list due to lack of students while others are overloaded and still others have no local services at all.  Researching schools for both current and future requirements can be a key factor for many parents, so it is a good idea to review this early in your Ottawa home search to determine your geographic focus.

Real estate is local:
Every market is different, so be careful not to assume that things in Ottawa real estate will be the same as the market you are moving from.  Housing types/styles, trends and key features and highest demand items in one local market may vary widely from those in another.

If you are relocating and looking for an experienced brokerage team to consult on your home or condo buying plans, we are more than happy to help!  Give us a call at 613-435-4692 or check us out online at our co-ordinates below:

Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage
613-435-4692 or mobile 613-371-9691
oasisrealty@rogers.com
oasisrealtyottawa.com
One of the highest ranked and “liked” real estate pages on facebook:
http://www.facebook.com/pages/Oasis-Realty-Brokerage-Ottawa/209265863918

Follow us on Twitter for “all the real estate news that’s fit to post”  https://twitter.com/OasisrealtyOTT

One of Ottawa’s best real estate blogs: http://blog.oasisrealtyottawa.com/