Ottawa average residential selling price approaches $600,000 during August

residential average sale price jumps 22%…how long can this continue?

Ottawa’s market continued red hot through August with the average selling price of residential properties during the month rising 22% from a year ago to $592,548.  Residential sales recorded a 21.8% increase in transactions, while condo sales grew at just over 2% but recorded at 24% increase in average selling price to $383,640.

Some good news on new listings….but…
We had our strongest month of the year for new residential listings which grew 18.6% vs 2019 but alas, residential sales growth pretty well absorbed all those new listings.
New condo listings for the month were also up 41.4% for the month.

Month end inventory still scarce for buyers:
At month end, we still have a huge deficit with residential properties down 49.8% vs August 2019 and the number of condos available for sale down 17.6%.  Though each grew slightly from the figures posted at the end of July this year.
The only significantly growing month end inventory area is rentals which were up 31.6% vs a year ago.

Key performance indicator:  sales to new listings ratio
This metric compares the number of new listings during the month to sales.  In August 2020 this ratio came in at a super high 83.2% for residential properties and 72.5% for condos.  A balanced market would see this ratio in the 40-60% range.  By comparison, the Toronto Real Estate Board, reported a sales to new listings ratio of 58% and with a surge of new listings of 56.8%.

Do I buy? Do I sell?  Do I wait?
Tough conundrum on many levels for those considering a move in real estate.  Will the economy worsen?  What factors am I risking by buying or not?  Will prices ease, if the economy softens or will government spending and support programs keep the economy rolling and with cheap mortgage money and scarce inventory of housing, the average house has been going up some $20,000 per quarter in 2020.  Am I a fool to miss out on this market?

Aug 2017 vs Aug 2020 pricing snapshot:
Can you believe that the average residential selling price in Ottawa only 3 years ago during August was $420,337.  This means average selling prices have grown 40.9% over just 3 years when comparing this August 2017 figure to our current month which saw an average residential selling price of $592,548.

Still room to grow?
This seems super high by Ottawa standards but when one compares it to Toronto at $951,404 and Vancouver at $1,038,700, our prices still seem to offer pretty good value.  Our blended average price, once condos are added is $542,872 during August

 

No one has a crystal ball?
We all wish we could accurately predict where this market is headed and it could certainly take some widely divergent directions.  While one intuitively, cannot see these kind of price increases continuing, our market is still growing and our price levels are still significantly lower than major centres.

Taxes:

We do not yet have the Municipal Land Transfer Tax (MLTT) or the Foreign Buyer Tax or vacant property tax, so that makes our market attractive for foreign investors.  There is some concern that immigration may stall with COVID and limited housing requirements for new Canadians or those with visas coming to study or work here.
Will the Federal Government follow through with the rumoured capital gains tax on (some?) residential home sales?

New government in town?
Government action (or lack thereof) can have a profound effect on housing and our Ottawa market is even more reliant on government activity than other markets.  If the current Federal government minority continues with its social aggressive benefit plans and other spending, our market should continue to rock and roll.  We believe that for every government headcount added, at least one more job or full time equivalent is added in the private sector.  Should a sea change on spending occur at the Federal level due to political pressure or a change in government, then one might expect some kind of budget tightening exercise which could impact Federal headcount and program funds.  Every headcount lost also has a ripple effect in the Ottawa economy, too and further dampen market outlook.

On the surface, the current Liberal-NDP coalition seems likely to likely to continue which probably means good news for Ottawa real estate.  But as the 1990’s demonstrated in spades, even Liberal governments have to wield a budget axe, if sufficient political and market pressure is applied and that is another scenario we would prefer not to encounter again.

Even if our market plateaus or flattens, Ottawa is still a very safe and reliable real estate market.  Prices tend to be “sticky” (i.e they don’t drop that much, regardless of market conditions)  What tends to happen is that the whole market simply stagnates, demand dries up and the number of sales transactions drop, should economic or job uncertainties appear to be greater or banks or governments tighten lending practices.

Buyers and sellers will have to assess a lot of factors in making their decisions and Realtors are here to help with the most up to date statistics that can help make better long term decisions.  The key stats to follow are the sales to new listings ratio and the overall listing inventory, as these will often signal a swing in market supply and demand factors.

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

Average home prices up $25,000-$40,000 through November 2019

a wintry November did not slow sales

The Ottawa Real Estate Board (OREB) results for November show another strong sales month, despite the early onset of wintry conditions. Unit sales and average home prices both approached double digit gains, compared to November 2018.  The market shows no trends of flattening out, except for the usual seasonal fluctuations.

Key average price milestones reached this year:
The average detached home price has sold this year for $510,975, an increase of 8.4% or $39,693, breaching the $500K mark for the first time.
The average residential row townhome has sold for $408,905, an increase of 9.8% or $36,620, topping $400K.
The average residential semi-detached home has sold for $489,656 an increase of 9.5%. or $42,447
The average condo sold this year has topped $300,000, coming in with a 9.1% price increase to 303,817 which is up $25,459 from a year ago.  Apartment condos lead the way with an average price of $324,459 up 5.7% while row units and stacked condos also showing similar $ price gains at $268,613 and $274,860 respectively.

Listing inventory continues to languish:
The number of new listings in November are pretty flat with a year ago, so while they are not getting any worse, they are not improving, either.  This means our supply/demand imbalance should continue for the short term, at least-given the strong sales demand.

At the end of November, our residential listing inventory was 22.6% lower than last year at the same time and condo listing inventory was 43.9% lower.

About the only listing category that was higher was the number of rentals that are MLS® listed, which are up 53.9% vs 2018.  Year to date rentals done via MLS® are basically flat vs last year, so that category is not seeing the same growth as the resale market.

City policy on short term rentals may put more inventory in the market:
Though there will no doubt be ongoing appeal action via OMB or other legal avenues, there could be a slight bump in available listing inventory and long term rental properties, from investors losing their ability to rent their (non resident occupied) properties via Airbnb or VRBO.  Numbers are not readily available of how many housing units fall in this category but this could have help the condo and urban market inventory where most of the short term rental properties are located.  Airbnb totalled some 4,600 listings in Ottawa over the last 12 months, so the number of investors involved might easily be 500-1,000 (or more) which would be welcome in the long term rental or resale markets.  Stay tuned!

New home construction:
New home sales continue to flourish and with the upward trajectory in the market, many new home buyers feel they are kind of “doubling down”, in that both their current home and the one “on order” or “to be built” are appreciating in price, while they wait for the new home possession which typically is 8-12 months or more, down the road.

Cost of waiting makes buying even more expensive:
Strong markets like this make it tough on all buyers, particularly first time buyers and those that are “fence sitters”, who are considering a move but don’t really have a compelling reason to do so, until they find the “right” property.  The upward price trajectory, however, makes the cost of waiting potentially significant.  For example, even if current prices only increase by 6% over the next months (a Re/Max projection for Ottawa), the average prices overall could look something like this:
The average detached single home will jump to $541,633 and a further hike of $30,000+ over current prices.

The average two storey single detached home could top $600,000 next year, with a 6% hike from this years’ average price of $567,456.

The average townhome would jump to $433,439 up $25,534

The average condo would increase to $322,026 overall and the average apartment condo to $343,926, each up almost $20K.

This means more down payment needed to qualify for appropriate financing, more to generate 20%+ down payment for investment properties, higher land transfer and mortgage insurance costs and a longer period to pay off mortgages taken out against these purchases.

These also represent only “average” price increases and higher priced properties could easily be going for $50-$100K more in the immediately foreseeable future, especially, if the current inventory shortage continues and the market generates another 8-10% price rise.

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

Stittsville real estate soaring through October 2019

Stittsville real estate outpaces market in 2019

Stittsville has experienced a building and population boom in recent years and is now approaching 35,000 inhabitants.  Quite a leap from being “just beyond the fringe” that was a popular radio commercial tagline back when Stittsville was a quiet village removed from both urban and suburban Ottawa with a population of 3,000 or so.  In fact, when combined with Kanata, the area has the largest population and number of residences in the Ottawa metro area and is the fastest growing.  Stittsville is projected to have close to 60,000 residents within the next decade!  So with all the new construction going on, it is no surprise that real estate has made strong gains in 2019.

This year’s residential numbers:
We are using the residential resale numbers for the 3 main Stittsville MLS® zones, though October 2019.(does not include any condo sales)

Stittsville North MLS® zone 8211 for sales north of Hazeldean Rd

Stittsville Central MLS® zone 8202 for properties between Hazeldean Rd and Abbott St.
Stittsville South MLS® zone 8203 for properties south of Abbott St.

For comparison purposes, the Ottawa MLS® as a whole has recorded sales increases of 3.8% in unit sales and an average selling price increase of 8.4% for residential properties to a price of $484,891.

North Stittsville (8211) is rocking!
This area closest to highway 417 has had and continues to have growth and new construction with a good variety of residential housing to cover many price points.  It also offers best access for commuters who rely on the 417 for commuting purposes.

Unit sales are up a strong 20.1% this year and the average selling price is up 11.9% to $473,866

Central Stittsville (8202) sees strong price growth but inventory limits unit sales:
Unit sales in Central Stittsville are actually down this year by 3.2%, perhaps reflecting the lack of listing inventory available.  Still, good demand has pushed the average price in this area up 13.6% to $552,472.

South Stittsville (8203) unit sales up 7.1% and the average price sold this year is $579,098, up 8%.
Most of these unit sales are resale homes and we have no visibility in to the numbers of new homes being sold in Stittsville but it is obviously significant at the present time, with most of this growth in the eastern section of Central Stittsville and in South Stittsville.

Outlook for 2020:
Expect to see continuing sales  and price growth as all the fundamentals continue to look good with the local economy and the pace and range of new home construction in the area is significant and pretty compelling for a lot of homebuyers, who may also feel that they should buy now, before prices escalate any further.  Those who have existing homes to sell then of course, offer that existing property for sale to co-ordinate with the new home possession date.

So it should continue to be “all systems go!  For Stittsville real estate in 2020.

 

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

 

 

 

Ottawa market continues strong through October 2019

Sun continues to shine on October sales in Ottawa

The Ottawa real estate market just keeps rolling along, with another double digit sales increase recorded in the month of October and continuing listing inventory shortages, with less than 2 months of anticipated sales currently on the market.

Residential unit sales for the month were 16.9% more than October 2018 and the number of condos sold was up 23% during the month.

Monthly average selling prices upward bound:
The average selling price of a residential property during October was $483,405 an increase of 7.6% over last year and the average condo sold for $319,208 which was up 18.3%.  On a year to date basis, the average residential price is up 8.3% and the average condo is up 9.1%

Listing inventory continues to slide:
Residential listings are down 22.3% vs last year at the same time and condo listing inventory is down a significant 38.8%.  New listings are not taking up the slack and are pretty flat vs last year, so our increasing sales continue to chew through available listing inventory.

Our number of listings currently available, is less than 1 per Realtor member of the Board.

36% of homes selling above asking:
This is a great new stat the Board is tracking and providing, so members and consumers are aware of the real degree of multiple offers.  So while it is quite common, it is not happening for every listing.  The Board noted in its release that in Oct 2018, only 21% of homes sold were sold above listing price, so our continuing inventory shortages are creating more competitive offer activity, although it should also be mentioned that a high % of listings are holding back offers, which can create a multiple offer situation.

Election fallout?
With the minority Federal government coming out of the election, it is highly unlikely the local economy will suffer, as both the Libs and NDP try to out-left one another, which only means more program money and staffing in the National Capital Region.  So our local economy should continue to be quite healthy for the duration of the minority government.

Recent job numbers:
Ottawa’s unemployment rate dropped to 4.2% in October, the lowest it has been since 2007, yet another positive indication that the bull market in real estate should continue in the short to intermediate term, those planning a move may consider acting on their plans, as that home under consideration may well cost $30 or $40K more next year.

Normally the start of hibernation period…but perhaps not this year?
Mid November is normally when real estate activity eases seasonally and troughs out for 90 days or so, until we get through the worst of winter and then things get brighter and more active mid-February on.  This market, however, should continue to post gains, though the seasonal slump should still occur as usual.

We are working hard to ramp up our blog and are happy to be added to a National list of real estate blogs which you can check out here: https://blog.feedspot.com/canada_real_estate_blogs/

 

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