3rd largest sales month:
April is typically the 3rd largest unit sales month of the year and this year looks to be no exception. Despite an ever lingering winter, sales have been strong through the first 3 weeks of the year.
Our totally unofficial numbers suggest a sales increase that will be at least in the 10-15% range for the month which would take us over the 2,000 mark for combined residential and condo monthly sales. (last year there were 1,795 properties sold in April and the 5 year average was 1,613.)
April is typically the 2nd largest month for new listing activity and listing activity looks pretty strong this year also and should be equal to or greater than the number of new listings in April 2017. Given our very tight listing inventory situation, this would be some good news for buyers, as new listings have trended down for much of the last 18 months, but with sales trending strongly up, sellers’ market conditions are expected to continue.
Total listing inventory:
Our current overall listing inventory is not even enough to cover sales for two months, when normally a balanced market would be 4 or 5 months of listing inventory, so no respite foreseen from our current tight inventory with the number 1 (May) and #2 (June) sales months next up.
Sales to new listings this month:
Again unofficially, our numbers show that the ratio of sales to new listings (and key performance indicator in real estate) is 70.4% during the month of April thus far. For reference: a balanced market is said to exist when sales: new listings is between 40-60% and a buyer’s market when the ratio drops below 40%.
Sales cancellations continue on the higher side:
Typically, about 5-6% of conditional sales fall through and do not “ firm” up and result in a completed sale. Our current run rate on this stat is more like 10-12% or double the normal. Financing and inspection issues are the principle cause but good old fashioned buyer’s remorse may also be a factor in a hot market where buyers have little time to consider whether to purchase or not.
What to expect?
Expect to see a lot of exclusive and “coming soon” listings, offer dates, “ bully” offers and multiple offers. The next few weeks are also the main time for out of town buyers (mostly military, RCMP and other government employees relocating) to be in the market, so activity will be fast and furious.
Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage
It could be “slim pickings” for buyers in 2018 Ottawa real estate:
The Ottawa real estate market has been improving steadily since spring 2016 and 2017 was probably the best year in a decade, with overall unit sales up 10.2% and prices up 6.8% for residential properties and 3.4% for condos.
The good news is Ottawa is still very affordable compared to many places across the country and one of its most stable markets.
Average selling prices 2017:
Detached single home: $ 451,306 +7.6%
Row townhome: $ 343,958 +4.9%
Semi-detached home: $ 420,042 +5.7%
Tougher news for buyers will be scarcity of listing availability in 2018 and definite upward pressure on prices, as listings have fallen to very low levels all across the city.
New listings were down 8.7% over the course of 2017 and that trend is worsening already in 2018 with new residential listings in January down 30% compared to the 5 year average. Overall listing levels are down 21.7% for residential listings at year end and 27% for condos.
With increasing numbers of sales and lower numbers of new listings, the supply-demand balance will be swinging even more in favour of sellers, so buyers will have to be very aggressive and prepared for a tough seller’s market.
Here’s some things to do to be ready to buy:
1) have your team in place, so you are 100% ready to buy: Realtor, mortgage broker, insurance broker, inspectors, lawyer. Make sure you and your spouse/partner are on the same page concerning priority level of housing features.
2) know your financial plan and pre-qualification levels before even looking at a property. Know whether you will need a property appraisal and if the new 2% qualification threshold applies to your file. Understand home operating and utility costs, as this may vary from your existing geographic location. For example: property taxes may be higher or lower and ditto for heating, electrical or water costs. Ottawa has much higher property taxes than Toronto per $ of assessment, for example and we also have rental hot water heaters which those from out of Ontario may not know.
3) have a realistic target of home by type, area, features and price and narrow that as quickly as possible. No sense chasing rainbows in a tough market for buyers. Wishing you can get the $525K house for $475K will not make it so.
4) have a plan for multiple offers. Well priced new listings will be attracting multiple offers, so discuss your position in advance with your Realtor.
5) consider builder quick occupancy inventory, as many builders are building some homes on spec to be available for peak delivery months ie summer.
6) search online for exclusive listings and other non MLS® posted properties. Many are “trying” listings out on 3rd party sites and social media before posting on MLS®, so you may find listings on social media groups or via search engine alerts.
7) drive through your geographic areas regularly (if possible) to look for new lawn signs popping up. New ones may have toppers that say: “coming soon” or “exclusive” listing. These may be good choices if you can find them before other buyers. The fragmentation of listings from the central MLS® system makes it difficult for buyer agents to stay on top of all new listings appearing in your areas of interest and one cannot be satisfied that electronic means will be sufficient in getting you in to see the hot new listings, before other buyers.
If we can assist with your Ottawa purchase plans this year or answer any questions, please do not hesitate to call 613-435-4692
Gord McCormick, Broker of Record and Principal Broker
Dawn Davey, Broker
Oasis Realty Brokerage firstname.lastname@example.org
The Ottawa Real Estate Board (OREB) June results report another strong month of sales and price gains. Virtually every indicator is positive and suggests continuing growth in the months to come.
Average prices and unit sales continue upward trend: Our best average price increases in many years with the average residential selling price up 7.2% to $427,721 and the average condo up 6% to $274,974 through the first half of 2017.
Unit sales: Residential unit sales are up by 10.8% and condos by 26.2% on a year to date basis.
Listing inventory plummets: The one somewhat challenging statistic is the continuing decline in new listings (-10.3% year to date) and the overall listing inventory at the end of June which shows the number of residential listings down 27% from a year ago and condos down 22.2%. (compared to historical highs at the end of June 2015, residential listings are down 36.4% and condos down 28.1%) This is a good situation for those selling but not so much for buyers.
These inventory levels suggest continuing strong demand for the foreseeable future.
New home sales up 44% The Ottawa Home Builders Association reported that housing starts are up 44% this year to date, compared to last-so builders are seeing very strong activity also. Accordingly, builder prices have bumped up this year and buyer incentives have generally decreased from a year or two ago.
More sales falling through: Conditional sales that do not firm up normally run about 5 or 6% but we notice that this is up to more like 8 or 10% this year. This may be caused by buyers who make an offer quickly and then have some buyer remorse. Another possibility may be that sellers are less inclined to adjust prices after home inspections discover some latent issues, thus causing buyers to walk on signed conditional agreements. Tighter mortgage qualifying rules may also be a factor.
These sales “fall throughs” are worrisome, as they effectively take a property off the market for 5-7 business days and then potentially leave a stigma as to why the deal did not proceed which may turn other buyers away from the property.
More offer dates and multiple offers: We are seeing many more offer dates or “no offers before”, as listing agents try to ensure as many buyers as possible get exposure to the property to optimize value for their sellers. Ottawa has always been more of an “early-bird-gets-the-worm” type of market but listing scarcity and stronger demand are forcing more agents and sellers to hold back offers. Note: while multiple offers have certainly increased this year they are not the norm, generally only a small % (perhaps 5%) will see multiple offers and over listing price sales., although this may be higher in very high demand neighbourhoods. There is a tendency for some in our industry to be over enthusiastic and make it sound like every property is selling overnight and with multiple offers and an over list price result. This may lead to faulty expectations and perhaps some impulsive buying and selling decisions.
The average days on market to sell a property (though improved) is still 40 days for residential properties and 60 days for condos.
So it is a strong market which brings some different challenges than we faced a year or two ago and buyers and sellers are encouraged to stay engaged with their industry professional to be fully on top of the market dynamics.
Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage
613-435-4692 or 613-371-9691 (mobile)
Quality brokerage services at lower commissions, 11th year in business
Ottawa real estate had record unit sales in May and the combination of all indicators suggests we are either in a seller’s market or very much on the verge of one.
Sales and prices were up and new listings and overall listing inventory were down thus making for a good month for sellers and listing agents but not so much fun for buyers.
May is typically our busiest sales month (followed by June and then April) as our market is boosted by families looking to move before school starts in September and also a strong transition of government staff (primarily military and RCMP) moving to and from our area.
Unit sales strong:
Residential unit sales up 12.4% for the month, condos up 44.6%
The number of residential units sold in May was 1856 vs 1612 a year ago.
Condo unit sales were 444 vs 307 in May 2016
On a year to date basis through May, residential sales are up 12.4% and condo sales up 27.1%.
Average prices increasing nicely: The average price of a residential property sold in May was $436,625 and increase of 7.4%.
The average condo sold for $270,993 in May an increase of 2.3%.
Year to date increases for residential properties sold is trending up 6.7% and for condos 4.9%. This is our best average price growth in 5 or 6 years.
Listing inventory continues to be the key indicator to watch! New listings continued to slow with condo listings lower than May 2016 by 6.3% and the # of new condo listings down by 13.2%.
Overall, the number of new listings is 10% lower this year to date.
End May listing inventory signals more demand in coming months!
The combination of strong unit sales increases and a lower number of new listings leaves us at the end of May with 25.3% fewer available listings in the residential market and 22% fewer condos that in 2016.
This means more competition for available listings in general and thus favours sellers. On an area by area basis this may vary but it does jibe with what we are seeing daily in the market.
New listings to sales ratio indicate seller’s market conditions during May:
The number of residential sales (1,856) to new listings (2607) yields a ratio of 70.2% and this is almost Toronto high! (a ratio above 60% is said to reflect seller’s market conditions, with 40-60% representing a balanced market and less than 40% a buyer’s market.) On a year to date basis the ratio is 58.8%, just short of a seller’s market
Condo unit sales for May (444) vs new listings (734) yield a ratio of 60.4%, also just in to seller’s market territory. On a year to date basis the condo ratio is 46.8% which suggests a more balanced market.
What can we expect in the long, hot summer?
We are certainly seeing more multiple offers and offers days being established by sellers and their listing agents, especially in key geographic areas and price points. Sellers should discuss their pricing and marketing strategy with their listing salesperson to determine the best course of action for their circumstances.
Buyers want to be on top of new listings (and price changes) and not wait for an Open House to go and see a property that may interest them.
Both sellers and buyers will also want to determine their own position on how they wish to participate in a multiple offer situation, should one materialize.
Why pay 5% commission to sell in a “hot” market?
Buyers and sellers need their salesperson or brokers’ advice just as much in a hot market as in a slower one….but do you really need to pay 5% commission on the selling side?
If you don’t think so, give us a call and we can explain our options that will *save you 26% to 50% of the selling fees on your sale. 613-435-4692
*not intended to solicit those with existing listings. Savings based on our range of listing commissions vs typical 5%.
Gord McCormick, Broker of Record Dawn Davey, Broker Oasis Realty Brokerage 613-435-4692 email@example.com Oasisrealtyottawa.com
An experienced, effective and inexpensive residential brokerage
It wasn’t too long ago that buyers had the upper hand in Ottawa, as we were saddled with excess listing inventory, flat sales and very low average price increases. It is looking like 2017 may be a whole new ball game though and we may be in the first stages of another seller’s market, which we have not had for at least 5 or 6 years.
2016 was a transition year: Between 2013-15 we experienced a period of excess listing inventory which combined with flat sales and price increases, created a market favouring buyers in general. (Although some high demand urban neighbourhoods may not have experienced this quite as much)
Starting about a year ago, we have seen unit sales improve consistently and though prices have remained fairly flat until recently, the number of new listings and overall listing inventory has decreased steadily…a good sign!
Overall listing inventory right now: (early March 2017)
Our current available listing inventory is well below (20%) some peak levels experienced in 2015 and new listings continue to lag behind by approximately 10%. Unit sales improved in 2016 and currently seem to be improving further. As these trends continue, we end up with a supply/demand shift favouring sellers and more competition among buyers for fewer available listings.
“Chronic”, overpriced, stale or unique listings:
There is always a certain percentage of listings that fall in to this category and these lower demand listings are bypassed quickly by most buyers. Though these listings are shown in overall “available” listings totals, they are not in high demand, regardless of the improved overall environment.
One buyer example:
In doing a search for a current buyer, we found the following out of 31 listings that met their general specifications:
Chronic listings on the market for extended period: 9 listings or 29% (anything beyond 90 days we consider chronic which means either the property has a problem and/or is overpriced.)
Busy street or other location issue: 7 (this young family does not want a primary or secondary collector street)
Unique listing or one with an obvious issue: 5 (not looking for a fixer upper or one with has obvious resale challenges in future)
Total: 21/31 listings or 67.7% of available listings are not viable for this particular buyer couple, leaving only 10 properties to consider. So while there might seem to be a fair number of listings, there really is not for these customers.
As it turns out our buyers have submitted an offer on one of these properties but it looks like it will be their 2nd go round in a multiple offer situation, in as many weeks.
New listings sell fast:
The sell through of new listings at this time of year is 50% or more of new listings selling in less than 30 days, so buyers don’t have a lot of research and decision making time. Being prepared and having a well prioritized search can really help ensure one is ready to jump on new listings, as soon as they happen.
There is not a major shortage of overall listings (a la Toronto) but the demand for quality listings is improving and in many cases, greater relative to supply, so buyers and their representatives need to be on top of their game or someone else will beat them to the hot new listings hitting the market.
Having a Realtor buyer representative fully engaged in one’s search is even more critical at this busiest time of the year.
Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage
Our Ottawa market is showing some strong signals that we may be seeing a return of seller’s market conditions, with stronger demand, rising prices and the increase in the number of multiple offer situations. This can be a stressful experience for all parties, particularly buyers who have not experienced the process.
We recently competed in a multiple offer (representing a buyer) on a detached single home in the south end which attracted 5 offers within 48 hours of being listed on MLS®. We were not successful with our offer and our buyers were very disappointed but we gave it our best shot in the fast paced process surrounding these types of situations.
Here are some of the key challenges in the process:
Compressed timelines: The listing was just posted on MLS® later on Monday. We alerted our buyers to the new listing that evening and requested a showing directly via the listing agent that night. We actually viewed the property twice on Tuesday, once with one of our buyers and the 2nd time with both buyers. (one of our buyers was actually able to take the day off work to get in to see property as early as possible)
We submitted an offer on Tuesday evening that was slightly over asking price, as we expected that demand would be reasonably strong given the amount of showing activity on the listing. We were aware of the fact that another offer was pending and it had been submitted just prior to our own offer.
Our buyers revised their offer price upwards, based on the 2nd offer.
The listing salesperson had now established an offer presentation time for Wednesday later afternoon. By early-mid afternoon Wednesday, we were aware that there were now a total of 4 offers registered on the property. (there ultimately ended up being 5 offers submitted)
Our buyers revised their offer price upwards a 2nd time to their absolute maximum and we submitted revised documentation to the listing sales person.
Buyer roller coaster: Buyers are caught on a roller coaster of emotions: from the elation of seeing a property they both really want in their price range and area, to happily submitting an offer which is over the listing price and hoping there are not too many offers, to frustration from waiting around without any control of the situation, to stressing about how much one should offer and avoiding temptation to overpay or remove some important condition from the offer which may help “win” the property bid but prove costly later, to the anticipation of waiting and hoping your offer will make it to the top of the pile, to the disappointment that comes from finding out that it was a good offer but not quite good enough.
Sellers are happier but not stress free: Sellers are definitely the beneficiaries of the best possible market value in these scenarios but they are certainly not stress free. This young family was pretty much shut out of their home for the better part of 2 days while buyers and their agents toured the property.
These sellers also have a home they are buying, so until their own property sells and firms up, they are not 100% sure of securing their own dream home. Even if it looks pretty good right now, it is still not over until the final paperwork is done with any buyer conditions satisfied.
Buyer representatives have a lot of conflicting pressures: All buyer representatives want the right property for their buyers and at the right price. While one-on-one negotiations with a listing agent and seller have one set of challenges and variables, multiple offer situations are completely different and the buyer representative has far less control or influence over the outcome.
Price, closing date and conditions are the critical factors and we want our buyers to win but not pay too much or sacrifice important conditions. i.e. like foregoing a home inspection or not including a financing condition.
Add to this the uncertainty of knowing what the “winning” price might be and how to properly advise buyers is a challenging task.
No “cake-walk” for the listing salesperson, either: The listing sales person has their own set of pressures in professionally representing the seller, co-ordinating access for showings, communicating on a timely basis with all interested parties and running a well-organized and credible multi offer submission, advising sellers on bid selection, negotiations and debriefing all who have submitted offers. This is a pressure packed process for them as well. In this case, we had a very professional listing salesperson who very ably managed all of these from our vantage point.
Everyone’s life is “on hold”: All parties to these situations are pretty much “on call” as the dynamics of these situations unfold and the process lurches towards a conclusion. Don’t miss out on a phone call, text or email-as you may lose out on timely information or ability to act upon that information. When the ultimate prize is so important, everything is circumspect and under a microscope. Did we do everything we could? Was there more information we should have had? Should we have been more aggressive? How much risk should we take?
This is definitely starting to look like a “you snooze…you lose” kind of market: What about the buyer representative who missed the listing or the buyer who wasn’t quick enough to even get in to see it? What about the buyer representative who wasn’t available to get their buyers in to see the property? What about the buyer who said: “let’s wait for an Open House”?
Bottom Line: It is always disappointing to “lose” but our buyers did everything they possibly could and are moving on to the next one. Our job is to find them an even better one than the one that got away and it’ll happen for them!
Though January is typically the lowest sales month of the year, (along with December) there are some very positive trends in the current market.
Strong residential sales in January 2017:
Unit sales have been trending up steadily since April 2016 and January continued that trend. Unit residential sales were up a solid 16.6% for the month and overall residential and condo sales were 8.6% higher than the 5 year average for January. Condo unit sales were flat in January but did sell at a higher price than a year earlier.
Listing inventory trending down:
This is a key category and indicator of overall market activity. We experienced several years (2013-2015) of increasing inventory levels which led to a supply/demand imbalance favouring buyers. Starting in spring 2016 this indicator started moving in the opposite direction and moved in to a balanced position during 2016. See chart: https://public.chartblocks.com/c/5895b4b79973d295631e48dc via @chartblocks
January 2015 listing inventory is 15.2% lower for residential listings and 10.7% lower for the number of condo listings, compared to a year ago.
New listings in January were 11% lower than a year ago and condo listings for the month 4.6% lower.
Balanced market or seller’s market?
If we continue the combination of higher unit sales with lower numbers of new listings and total listing inventory, then we may see more pressure on buyers and higher prices and move more towards a seller’s market. This is what can occur when demand outstrips supply and can be characterized by shorter selling times, higher prices and the existence of more multiple offers on listings. We have not had sellers market conditions (except perhaps at a neighbourhood level) for 4 or 5 years now, here in Ottawa.
We have also had reports of strong sales from builders on new construction and inventory homes.
Overall average prices are not leaping forward, as has been the case for the last number of years but the trend suggests this could change if supply limitations drive prices up.
This is a very important time of year for both buyers and sellers, as market activity grows on a daily and weekly basis from now through peak season in May and June, so it is a good idea to get one’s plans in place and existing properties ready to sell.
These overall numbers may not apply to all neighbourhoods, so if you would like to get an analysis done for your own property or area, feel free to give us a call or call your Realtor. 613-435-4692
Gord McCormick, Broker of Record
Dawn Davey, Broker Oasis Realty Brokerage
613-435-4692 or mobile 613-371-9691 firstname.lastname@example.org oasisrealtyottawa.com
One of the highest ranked and “liked” real estate pages on facebook: https://www.facebook.com/oasisrealtyottawa/
Average house prices mostly a bargain:
Those moving from the GTA or Vancouver will view overall Ottawa average prices (average residential selling price approx. $400,000) 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 2016 were in the $600-$750K ranges and topped $1.2 million in Rockcliffe Village.
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. Dominate 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.
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.
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.
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 email@example.com