Why Ottawa will have the best winter sales in a decade or more

sales should help “warm” Ottawa winter

Ottawa real estate normally pretty much hibernates from late November to late February but this may not be the case this year.  Buyers and sellers will want to consider the following factors and consider whether they wish to move up their buying or selling plans accordingly:

 

Listing inventory at decade lows:
The level of available properties to purchase continues to be extremely low and the number of new listings coming on the market, shows no signs of reversing this trend. Supply/demand alone would suggest that this has to put more upward pressure on selling prices.

Residential listings are currently 17.5% lower than last year, 35.5% lower than 2016 and 48.8% lower than 2015.

Condo listings are 34.5% lower than 2017, 45.5% lower than 2016 and 55.8% lower than 2015.

Even rental listings are down quite significantly, 31.6% lower than last for MLS rental listings.

Beat the price increase!  Your next house is going up $2-3K a month!

With residential prices on the way up (+5.7% through Oct 2018) that dream house is getting more expensive day-by-day.  For example:  a $500,000 property today may well be $525,000 or even $530,000 by the end of 2019 peak selling season.  That’s an increase of $2,000 to $2,500 per month and with mortgage rates also headed north, the cost of servicing a mortgage is also increasing.  The mortgage “stress test” which is typically 2% above the mortgage rate being offered is also moving upwards as rates rise thus making approvals more challenging for some buyers.

New construction price and availability:
Builders are also facing limited availability, after two record years of sales and also are facing some labour shortages and price pressure.  All of these factors will also continue to push up the price of new construction.

Mortgage rates:
Rates are pretty well guaranteed to rise a half point in the next 6 to 12 months, with an outside chance of going up a full % point.  This adds challenge to the approval process (mortgage stress test) and monthly cost for buyers and homeowners, so buying now and locking in at a lower rate will have some advantages. *new construction buyers will have to make sure they get a guaranteed rate from their mortgage broker or bank to cover them for the longer new build timelines.

Local economy is strong:
The local economy seems pretty solid regarding employment and there appears to be no signs of the Federal Government doing any significant belt tightening in advance of next year’s election. (Though one never knows?)  So our market should continue its current moderate upward path in the immediate future.

Provincial and municipal budgets:

A “new” city council in Ottawa is in place and we also have a relatively new Provincial government in Toronto.  The Provinces’ fiscal challenges are well noted and there are also signs that the City of Ottawa has its own issues.  Here are a few things that could happen that might add cost for buyers and sellers:

  1. If Ottawa council feels really in a budget pinch, is it possible that a Municipal Land Transfer Tax (MLTT) could be implemented here? This would add $5,000-$10,000 to the typical residential purchase transaction cost here and would cause a bubble and price run up in advance of implementation.   To put this in perspective: the total land transfer tax on a $500K home would jump to almost $13,000 and $21,000 for a $700,000 home purchase.
  2. What is the Provincial government going to do to fix their huge fiscal problem? Could they raise the level of the Provincial Land Transfer Tax? Add some other “luxury” or other tax on housing?
  3. Could Ottawa raise development charges which once again adds to the cost of new construction homes and condos?
  4. What effect will “inclusionary zoning” have on costs of new construction? This principle requires builders and developers to include provision for lower cost housing in their new projects but will certainly affect the cost of new properties, as it becomes more prevalent in the near future.
  5. Do the Feds have any plans in their National Housing plan that might affect buyers, sellers or homeowners?

 

Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage

613-435-4692 oasisrealty@rogers.com

Optimizing real estate transaction costs

 

does low listing inventory signal even more price increases in 2019?

Listing inventory end Oct 2018

Ottawa listing inventory is a prime indicator of our seller’s market conditions this year. Chart shows the tremendous change in October month end listing inventory over the last 4-5 years. (from a buyers’ market in 2014/15)
Residential listings are currently 17.5% lower than last year, 35.5% lower than 2016 and 48.8% lower than 2015.
Condo listings are 34.5% lower than 2017, 45.5% lower than 2016 and 55.8% lower than 2015.

Why aren’t prices up even more?
Given these figures, one almost wonders why we have not seen even more upwards price pressure, with residential prices up (only) 5.7% in 2018 to $449,005 and condo selling prices overall essentially flat with an average selling price increase of only .6% to $271,350 at the end of October.

On the good news front, new listings appearing on a monthly basis are starting to level off somewhat, so the listing inventory situation does not appear to be getting any worse.  Many buyers however, are finding it very difficult to find and secure the property they want.  Low listings and quicker selling times have resulted in more multiple offers which typically generate a selling price above the listing price.

Now is great time to be planning a purchase or sale for 2019, as one can only see more scarcity and perhaps even higher prices in 2019.

Gord McCormick, Broker of Record

Oasis Realty Brokerage  613-435-4692

Ask about our amazing 2% exclusive listing fee!

 

Trends in legal services for real estate closings

Lawyers play a critically important role in closing real estate transactions and providing advice to buyers and sellers along the way.  At a recent legal seminar presented by Mark Weisleder of realestatelawyers.ca, we got a short update on several new trends in the closing process that are focused on making life simpler for both consumers and realtors.

Some lawyers will now come to you:
There are more than one lawyer around offering mobile services but it is certainly a great option for many buyers and sellers.  Having the lawyer (or representative) come to your office or home can be a time saver and very convenient.

Electronic funds transfer:
Lawyers can now do electronic funds transfer more readily in both accepting deposits and closing funds plus disbursing proceeds.  Super time saver for all concerned.  Saves trips to banks for certified cheques or bank drafts.

In the case of realtors, we receive commission funds immediately upon closing, along with notification that the deal has actually closed.  Age old system has relied upon lawyers mailing a commission cheque upon closing and the listing agent brokerage processing that cheque through their own banking network, while also cutting a paper cheque to the co-operating brokerage. Sellers of course, had to make another trip to the lawyers’ office to pick up a cheque for any net proceeds of their sale.

Multi-site closing locations:
Though interaction is minimal on real estate closings (1-2 meetings) many lawyers are now offering closing services in multiple locations across the city (or in the case of realestatelawyers.ca, at 35 locations across the Province)

House Key Management:
A cute and interesting timesaver for buyers and sellers, is that realestatelawyers.ca provides a lockbox to a seller which they install on or before closing day with a set of keys inside.  Once the transaction has closed, the sellers’ lawyer provides the lockbox code to the buyer and their lawyer and the buyer can gain immediate access to the property without having to drive to the sellers’ lawyers’ office or other physical location to pick up the keys.  The lockbox is gifted to the buyer, thus saving the necessity of a representative returning to the property to retrieve it.

Condo Status documentation package available electronically or on a rush basis:
Condo status certificate review is a critical function of a lawyer on a condo purchase.  Property Management companies have 10 days by law to produce these docs for a lawyer representing a buyer at a fee of approximately $100.  This is typically quite a pile of legal docs and schedules that have been photocopied numerous times but finally, these are being made available electronically.  (although most here in Ottawa still seem to require paper and a physical pick up or courier charge to get these to the buyer’s lawyer.

The 10 day allowable timeline for Property managers to produce the docs (though most are done within 5 business days) does drag out the conditional sales period for a condo sale.  This is not advantageous for a seller, as their property is pretty much “off the market” or suspended while awaiting these condo docs. Many property managers will provide an expedited service (24-48 hours) for double the typical fee (ie. Therefore $200) which becomes the buyer expense.

Condo docs good for 90 days:
We think a better idea all around, is for sellers to order the condo Status documentation package at time of listing and make it available to buyers and their agents to review when in advance of making an offer to purchase and thus shortening the need for an extended conditional period.  These are normally 5-7 business days for residential properties and 10 business days for condos. Condo status document packages are good for legal purposes for 90 days from date of issue, so as long as closing is within 90 days of the package date, they are very useful.

Multiple offers:
Having condo docs immediately available greatly facilitates multiple offers.  In Toronto, approximately 50% of sellers invest in condo doc package at time of listing, although it is still fairly rare here in Ottawa.  Some are doing it but probably less than 5%.  This is an idea worth pursuing for anyone selling a condo.  Buyers will want to make arrangements with their lawyer to review these docs ahead of making a purchase, as what is contained in those docs may determine whether or how much they wish to offer for the condo.

Fees and Disbursements:
A reminder for both sellers and buyers to be sure to ask for the cost of legal fees (the lawyer fees)  and disbursements necessary to process a specific transaction.  These fees include land transfer tax, mortgage registration, title insurance, courier fees, govt fees and other services necessary to complete a transaction.

Fees are usually slightly higher for a buyer than a seller. (+$200)

Gord McCormick, Broker of Record
Oasis Realty Brokerage
Ottawa 613-435-4692

oasisrealty@rogers.com  oasisrealtyottawa.com

 

 

 

 

 

 

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.

 

 

April 2018 poised to break monthly sales records?

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.)

New listings:
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
613-435-4692 oasisrealty@rogers.com

Are Realtors sabotaging MLS® with “grey market” listings?

We have experienced a relatively strong market over the last 18 months and listing scarcity has become an issue, as many areas have only a month or two of listing inventory. Listings in 2017 were down approximately 25% from the previous year (35% over 2 years) and with healthy sales, this made things difficult for buyers and their agents, especially those with an existing property to sell.

“Grey” market listings abound: (non MLS®)
In the face of dwindling listings, many Realtors (and their sellers) are getting creative about how they plan to market the listing to the best advantage of seller and Realtor. This includes the use of “exclusive” listings, “pocket” listings and future sale listings.  In most of these types of listings the listing agent does not publicize the listing widely/openly on the MLS® system.  (or at least initially) Instead these Realtors market via social media and a variety of 3rd party online sites.   Have you seen those “Coming Soon” or “Exclusive Listing”signs on front yards in your neighbourhood?  This is most likely an indication of a grey market listing.

How is this advantageous? (and to whom?)
Realtors do this for a number of reasons in our opinion:
-Realtors leverage the listing to potentially generate other buyer or seller prospects
-Realtors have a chance of “double ending” the listing, if they are able to find a buyer without having to pay another Realtor.
-The listing agent in many cases will have used these marketing concepts, combined with a lower listing commission to help close the listing in the first place.
-Realtors may be able to avoid the cost and time involved in some steps of the listing process ie professional photography, staging and also get to a sale sooner.
-are all the above consistent with the Realtor pledge of “first duty to client” or is the Realtor’s own marketing and prospecting activity subverting their principal duty to their seller client?
-some sellers may prefer not having a “wide open” MLS® listing where everybody and their brother are free to book random appointments to see their home.

So what’s the down side?
-these “ secret” listings become a bit of a holy grail and many Realtors really play this up:  Ie “ deal with me and I will get you the inside scoop on all the new listings, so you get to consider them BEFORE they hit MLS®.  Nobody, has access to all the “secret” listings, no matter how strong they may be in the neighbourhood.  The fairest and most democratic way is for all listings to make their way to MLS® where they can be considered by all buyers and their agents.
-all buyers do not get to consider the property and therefore demand is generated by only a small portion of the overall market.
-Buyers may be encouraged in to making a more impulsive offer, given the relative scarcity. This can result in buyer’s remorse and more conditional sales falling through which has been a factor in our market.
-these grey market listings that do not get to MLS®, also then further diminish the level of listing inventory available to MLS® buyers and therefore enhance the supply shortfall and help cause prices to rise.
-MLS® in recent years even includes most of the FSBO listings, so it is a fantastic central repository and marketplace. By withholding listings from MLS®, Realtors are not doing their seller, buyers or Realtor colleagues any favours.  Think for a moment if there was no MLS®?  Would you want Google or facebook to decide what listings you got to see?  MLS® is still ad free, too!
Do you want to have to scour hundreds of websites daily to find and stay on top of new listings in the marketplace?

Selling scarcity is nothing new:
Realtors, buyers and sellers will always adapt to scarcity and attempt to find ways to take advantage and this is no different, unfortunately, it can also lead to further scarcity in MLS® listings and possibly further demand spikes and price increases which is not good for buyers. It also removes some credibility from the MLS® system, if “ new”  listings are deemed to be old news by the time they are published on MLS®.

Seller choice:
A seller may find a deal without having to go through the full-fledged MLS® prep and marketing process and if they are happy with what they get, then so be it. Clearly, however, the best market value is to be obtained with the widest possible exposure to all buyers and their agents and that only happens with a listing on MLS®

Proponents will argue that they are only “getting the best deal” for their seller client but in many cases, we believe Realtor marketing and differentiation are the principal reason for use of these “grey marketing/non-MLS®” listings and that on balance this is not good for the overall market as it fractures and weakens the  central source of MLS® supply and exacerbates already existing supply problems.

Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage 613-435-4692  oasisrealty@rogers.com www.oasisrealtyottawa.com

12th year in business as a lower cost brokerage

 

Why are so many conditional sales falling through in 2017?

We have noticed a marked increase in the number of sales that have “fallen through” this year and not firmed up, once conditionally sold.

A conditional sale is reached after an Agreement of Purchase and Sale has been agreed to and signed by both parties and typically calls for a conditional sales period during which the buyer satisfies their purchasing conditions such as inspection and financing. This period is generally 5 business days for most properties but may run to 10 business days or more if additional inspections are required or in the case of condominiums where buyers must wait for the property manager to produce up to date condo status documentation.

What metrics do we have on the issue?
Unfortunately, this data is not recorded, reported or available in any meaningful way by our real estate board or realtor system. On our realtor dashboard, we have a section of the screen that keeps us informed about the number of new listings, price changes, conditional sales, sales, listing cancellations and the telling “back on market” category.  (here is what a section of our realtor dashboard looks like and our only source of data)

 

New Listing (111)
Back On Market (18)
Price Decrease (48)
Price Increase (1)
Conditional Sale (100)
Sold (87)
Expired (21)
Leased (0)
Cancelled (34)
Rented (13)
Suspended (2)

Back on market listings are those that are returning to active status and are mostly made up of those that were previously conditionally sold and are now being returned to “active” sales status.

Historically, this “back on market” category runs about 5% of new listings in our experience over the last several years. This year however, that number is more like 8-10% or more which means that the number of sales falling through is approaching double what it had previously been.

What causes sales to fall through and why so many more this year?
Good old fashioned “buyer’s remorse”
Buyer’s remorse can always be a factor in sales falling through. One partner may have liked the property more than the other or perhaps the buyers are just not prepared enough or on the same page regarding key buying criteria.  When this happens, unfortunately, many other parties are affected and their plans sidelined.

Because of our stronger market this year, many buyers may feel rushed to put in an offer before they are really ready, as they fear “missing out” on the property if they don’t.

Seeing a property once for a 30 or 40 minute visit may not be enough to get a full grasp or comfort level, so we may be seeing some impulsive buying decisions as a result. We recommend at least two visits to a property for buyers but this market doesn’t necessarily allow time for that level of investigation and research..

This can be especially so for buyers shopping high demand areas and price points who may have lost out on other properties or multiple offers by not being “quick enough”.

Inspections:

Inspections are the number 1 cause of sales falling through, because hidden or pricier to fix than expected items in a home, once understood, often lead to a renegotiation of a selling price which means there is a chance for the deal to fall apart.

In our market favouring sellers, many sellers may believe that there are lots more buyers out there waiting to buy their property, so may not be motivated to adjust the agreed selling price or fix issues pointed out in inspections. This is very true for properties which sell fairly quickly after listing or those sold in multiple offers.

Buyers in these circumstances may be feeling they are paying a premium price for a property and therefore can have an expectation that certain things should be addressed by a seller, so there is good potential for a disconnect between buyer and seller.

Financing:

As mortgage qualifications have tightened (and now with rising rates) more buyers may be getting surprised when the time comes to get the final mortgage approval during the conditional sales period. If there are hiccups in mortgage approval, some buyers may have to walk away from a house they really love.

So why is this is this a worry in a strong market?

Sales that fall through waste a lot of time, energy and money. A seller’s property is effectively “off the market” during the buyer conditional period and they may lose other qualified buyers who buy something else in the interim.

The seller’s plans are totally “on hold” and they cannot go forward until the sale firms up, so it can be a stressful waiting period for all involved. Realtors meanwhile, get no extra compensation for having helped buyer or seller through a transaction that does not complete.

Stigma on conditionally sold property:

Like it or not, there is a bit of a stigma attached to a property which has been conditionally sold but then falls through. So much so, that the real estate board allows the record of that conditional sale to be expunged from the sales history record, so as not to prejudice future buyers and their realtors.

Most buyers and Realtors will be suspicious and assume there was some inspection issue that surfaced.

Can you imagine how many fall through in private sales?

If a large number of sales are running in to problems with professional realtors advising both buyer and seller, can you imagine what the factor might be in the private sale arena?

Bottom line:

This is an offshoot of what is essentially a very healthy market with strong demand and enthusiastic buyers possibly jumping too soon for fear of losing out on a new listing. It also tests realtors who must do their utmost to make sure their buyers are fully prepared to complete conditional sales and negotiate the inevitable rocky patch that may occur between conditional sale and firm.

Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage
oasisrealty@rogers.com
www.oasisrealtyottawa.com  blog.oasisrealtyottawa.com
https://www.facebook.com/oasisrealtyottawa/
https://twitter.com/OasisrealtyOTT

11th year in business as a full service lower commission brokerage

 

 

Stittsville real estate report: midyear 2017

Stittsville landmarks

We are having the best year since 2010 in Ottawa real estate, with unit sales and prices up nicely and listing inventories dropping significantly from some historical highs in 2015.

Overall unit sales are up 10.8% and average prices are up 7.2% to $398,872 across the Ottawa Real Estate Board (OREB)

Builders are reporting an extraordinarily strong year with one report indicating a 44% hike in unit starts and one builder reporting that sales have doubled in the first half of the year!

So how is Stittsville doing?
Stittsville market is keeping pace with overall growth with the exception of areas north of Hazeldean Rd which is fairly flat in both sales growth and price increases.

Desperate need of more listing inventory north of Hazeldean Rd!
MLS® zone 8211

Unit sales are down 7.6% compared to midway in 2016 and average prices are pretty flat with an increase of .5% to $393,237.

Very limited listing inventory may be the cause of relatively fewer sales, for example, this area has only 22 total listings at time of writing and that is barely one month’s worth of sales! So this is a great time to be selling in Stittsville North (Fairwinds, Jackson Trails, Bryanston Gate, Timbermere, Poole Creek) especially.

One would have thought that this should push average prices higher but is not the case thus far. The other two Stittsville zones below have a more reasonable 3 months’ worth of listing inventory, although still much lower than in previous years.

Central Stittsville: (MLS® zone 8202 between Hazeldean Rd. and Abbott St.)

Unit sales are up 25.6% and average prices up 8.2% to $468,745. 55 residential properties currently listed.

South Stittsville: (MLS® zone 8203)

This area is also seeing strong results with unit sales up 21.7% and the average price up 5.8% to $512,666. 50 residential properties currently listed.

Key Factors:

Builder competition:
With so much new construction in Stittsville and Kanata, the resale market is always competing with builders. This can have an effect on those selling, particularly if the home is less than 5 years old and the builder still offers that particular model for sale.

Builders have been raising prices this year, along with the market overall.

Construction disruption:
Some streets/neighbourhoods may have resale affected by new construction in adjoining parcels of land, particularly where that development may change the ambience or traffic patterns.

The military invasion continues!
With the migration of DND HQ to DND Carling Campus at Moodie Dr., Stittsville and Kanata continue to be very popular for military families.

If you would like more information on this or any other neighbourhood and are not currently working with another Realtor by all means give us a call 613-435-4692 or check us out at our online co-ordinates below.

Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage
oasisrealty@rogers.com
www.oasisrealtyottawa.com
@oasisrealtyOTT
http://blog.oasisrealtyottawa.com/

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Ottawa real estate “stellar” midway through 2017

 

 

 

 

 

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)
Oasisrealtyottawa.com

Quality brokerage services at lower commissions, 11th year in business

 

 

 

 

 

Let’s dispel a major myth about Ottawa real estate in the summer!

Let’s dispel a major Ottawa real estate myth: that summer is “dead” in real estate

It has long been held that summer is dead in real estate and things pick up in the fall…but is it really true?

….not so much, as our research has proven! (See monthly unit sales chart)

We hear this all the time from sellers, home owners and even other Realtors who seem to think that there are two “prime” or “peak” seasons in Ottawa real estate: spring and fall.  We hear statements like “everyone is on vacation” or “gone to the cottage” etc. thus explaining why real estate “dies” off in the summer and somehow is magically reborn and “things pick up after Labour Day”.

While it is true that summer sales do dip compared to the super peak season in May and June, July and August are the next best sales months the market will see until the following April, so serious buyers and sellers should not put their real estate plans “on hold” until the fall’s purported “2nd season” in the Fall.

Summer unit sales: July and August 4th and 5th strongest months

Sales in July and August are some 20-25% less than those in April-May and June but are still usually well ahead of sales in September and October which are a further 10-20% lower, followed by November when sales start to go in to the winter hibernation phase of Ottawa real estate.

New Listings and total listing inventory are also typically higher in the summer months than in the fall and winter, so it is a great time to be buying also.

How did this myth get started?
…hard to say but possibilities include:
After a busy spring season, some Realtors may be looking for a bit of a break themselves, which is hard to do when one has to be “on call” and readily available close by to support a new listing or buyer client. So if a buyer or seller plans can be deferred a couple of weeks, the Realtor can sneak in some summer vacation time for themselves.

Also, some Realtors may feel that for whatever reason, a certain property may get more attention in the fall or they may simply be trying to save some business activity to anchor the balance of their business year, especially with the typically slow winter season approaching from mid-November on.

There may be some valid reasons in terms of market circumstances, competitive listing inventory, seller vacations, property preparation for listing and so forth but let us be perfectly clear: don’t delay listing your property in July or August because you think business is stronger later!

Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage
613-435-4692 or 613-371-9691
oasisrealty@rogers.com

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