Stittsville sales strong out of the gate in 2019

Stittsville sales hot in winter 2019

Stittsville real estate continues demonstrating strong sales activity, despite the listing limitations and the presence of significant new construction activity in the Stittsville and South Kanata areas.

Overall residential unit sales on MLS® through February were up 51.9% (82 sales vs 54), it’s early yet and these are two of the three lowest sales months of the year!

Stittsville North of Hazeldean Rd. (MLS zone 8211) leads the way in units sold, with 38 sales this year vs 15 a year ago.  Prices in Stittsville North were also up strongly, with an average selling price of $429,530 up 12% vs 2018.

Kanata, meanwhile, also moved ahead with a 9.7% unit sales increase through February and an average selling price of $473,558, an average increase of 8.2%.

Barrhaven posted a unit sales increase of 16.9% at an average selling price of $465,043 which represented an average selling price increase of 11.1% vs last year at the same time.

Ottawa overall:
For comparison, the total Ottawa area unit sales are up 8% and average selling price is $451,446, (up 5.4%)  so the 3 suburban communities noted above are certainly ahead of the overall average thus far this year.

Key trends:
Listing inventory remains extremely low and we have seller’s market conditions.  So while this makes selling a home somewhat easier, the buying side can be a real challenge!

We are seeing listings sell faster and though we do not have definitive stats, it would appear it is another year that will feature many “offer dates” in listings and correspondingly, more multiple offers.

Strongest activity and demand is in the $300-$450K price segment which accounts for over 42% of sales.

Builder sales continue to be strong and prices are also advancing.  Buyers can expect lineups for new lot releases and diminished sales incentives, as builders continue to record strong sales.  Delivery timelines may also be pushed out, as builder resources may be strained in some cases, as they are recording strong sales on top of existing orders for homes under construction or to be built.

Expect to see fewer open houses, (and more cancelled ones) as properly priced homes in the midrange category sell very quickly.

Tips:
Very fast paced market and probably not one a buyer or seller wants to navigate without a Realtor on board.

Existing homeowners may want to consider a “listing readiness” evaluation, just in case the next “dream home” happens to hit their radar this year.  Even if you have no plans to move this year, be aware that prices could rise as much as 7 or 8%, given the current listing inventory shortage.  This means the average dream home could be going up as much as $30K-$40,000 this year!

We suggest you contact your Realtor to obtain a market evaluation and listing readiness review done, even if you don’t have immediate plans.  Doing so, may help decide on reno’s, updates or repairs that can be researched and completed over the course of 2019.  When one finds the dream home, there is no time for any of these activities.

Feel free to give us a call with any real estate question and we would be happy to assist, if you are not already working with another Realtor, You can also find us online at our website, blog and social media sites below.

Regards,

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

oasisrealty@rogers.com  oasisrealtyottawa.com

@oasisrealtyOTT  https://www.facebook.com/oasisrealtyottawa/

 

February 2019 sales limited but average prices surge

snow and cold did not deter February buyers

Ottawa real estate showed a slight unit sales increase in the month of February 2019 of 2.8%, just a handful of sales ahead of last year.  Continuing listing inventory shortages pushed prices up but curtailed unit sales increases.

Here is a snapshot of key indicators for the month’s sales:
Unit sales:
Residential sales were up 3.8% during the month and condo sales were flat compared to last year.
Average prices:
The average residential sale was up 8.6% to $466,540 and the average condo sale was up 5.6% to $288,354
Listing inventory:
Residential listing inventory is 20.1% below last year and condo listing inventory is 31% lower than last year.
New listings:
Further compounding the listing inventory situation is the fact that new listings during the month were also on the negative side, with 6.5% fewer new listings during the month and 21.9% fewer condos.
If these trends continue, we should see continuing upward price pressure and a continuation of the sellers’ market conditions.

For your neighbourhood specific details, contact your Realtor or the undersigned.

Gord McCormick, Broker of Record

Oasis Realty Brokerage  613-435-4692 oasisrealty@rogers.com
text: 613-371-9691

Is Zillow the Netflix or Uber of the real estate business?

Zillow is now in Canada

What is Zillow™?
Zillow is one of the leading online real estate companies in the US and has recently expanded its presence to Canada.  The eventual public availability of sold data via the Competition Bureau vs Toronto Real Estate Board court decision in 2018 was a key milestone in this expansion.

Zillow™ (www.zillow.com ) was founded in 2006 by two ex-Microsoft employees and has since grown to $1.3 B in annual revenue. Headquarters is in Seattle and they are traded on Nasdaq. They have primarily grown by posting listings, attracting consumer clicks and selling advertising to real estate agents and other 3rd parties.  The have also amassed a collection of real estate related businesses and generate a huge volume of online traffic.

Where do they see the future?
While today they would characterize themselves as a real estate advertising and technology company,  in the future it seems clear they see tremendous growth for providing end to end “one-stop-shopping” via an online real estate system that connects buyers to sellers (with or without agents?) inspectors, photographers, stagers, mortgage brokers, lenders. Lawyers and any other party necessary to do a real estate purchase and sale.  They already have a system in the US where consumers can sell their home to Zillow for a guaranteed amount and then Zillow will remarket that property either themselves or via their existing Premiere Agents.
In a recent conference call on their Q4 2018 results, the company apparently has growth targets to get it to $22B in annual revenue in the next 3-5 years.  This is quite a leap from the current $1.3M !

Real estate market disruption:
Many consumers would agree that real estate has been ready for an Uber like disruption for some time and there is certainly some truth in that.  There is even a new business segment called Proptech that has generated large amounts of venture capital and stock market investment in recent years and this alone will push the sector development and growth exponentially.

Zillow™ has either built or acquired quite a few real estate related businesses and technology for providing better service and information to both consumers and Realtors and at a recent presentation here In Ottawa, quite strongly presented the position that organized real estate was an important stakeholder in their system and would continue to be.  In fact, we saw some US stats recently online that said that something like 93 % of real estate transactions in the US (National Assn of Realtors) involved a real estate professional which is actually quite higher than a decade ago.

In Canada?
Zillow ™ started up in Canada with its first hires in 2018 and has been publishing listings which of course are critical to getting the maximum online traffic.  Having the data on sold properties will be huge and eventually allow them to offer their Zestimate ™ feature which allows a consumer to get a real time online estimate of their homes value, using their advanced AI algorithm that depends on the sold data.  Consumers already see lots of these online but mostly rely on a Realtor on the other end to create an evaluation.

Getting this data and data from other sources (tax assessment, etc) and knitting it all together for Canada will take some time and the big challenges will be a) getting a significant % of Realtor listings and b) getting sufficient Realtor advertising funding and c) navigating the provincial regulatory rules across Canada to ensure compliance d) assimilating all the data and getting the word out to consumers e) dealing with all the local issues typical in Canada ie need for bilingual service, small widespread geography

Zillow is one of many but perhaps the best established:
There are many new entrants in the real estate business, and Zillow is but one of many.  They seem to have (for now anyway) an expansion by co-operation with organized real estate.  Many others do not and seek to simply eliminate and streamline the buying and selling process as much as possible and if that means eliminating the real estate agent and brokerage then so be it.

Purplebricks™ is another newer entrant to the Canadian market which is essentially a similar online business (though much smaller) disguised as a for-sale-by-owner company and a real estate brokerage.  Purplebricks™ is a UK based company which bought the Comfree organization in Canada last year.

Interesting to note: like many technology companies and other start-ups, few of these new companies are profitable, including Zillow™ which showed a net loss of $119M in 2019 on sales of $1.3B.

We think Zillow with their long term development in the US, will eventually be a leader in this space, here in Canada.

Just because it’s feasible, doesn’t mean it’s completely ready for prime time:
S
o there are many interesting changes coming for consumers and organized real estate but things often take a lot longer to materialize on the ground than technology and streamlined visions anticipate.

We are fortunate that we are not on the leading/bleeding edge of all these progressive disruptors and by the time they get to us in Canada, the winners will have been largely decided.  We have already seen failures and bankruptcies in this space in Canada.

In the meantime, Realtors must decide if and how they choose to participate with new entities such as Zillow™ and adjust accordingly.  Given the history of real estate in Canada where a strong national MLS®  program has been built on a very good system of “co-opetition”,  we can expect Realtors to be wary but ultimately adjustable.

Interesting times ahead to be sure!

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

 

 

 

Should showings continue after a conditional sale?

What’s the point?  If it’s already sold….

Sellers can be excused for not really wanting to continue with additional showings after agreeing a conditional sale with a buyer.  It is understandable that sellers might wish to take a breather, after all the preparations for listing the property and the rush and stress of the initial deluge of showings.

Buyers, too, generally have little enthusiasm for a property that appears to be already “spoken for” by another buyer.  After all, why get all excited about the property, when another buyer is in control of that property during the conditional period.  Many buyers are afraid that they will be disappointed after seeing the “one that got away”

Even buyer representatives can be somewhat reticent about investing time in showing a property that their buyer’s cannot buy.

For the above reasons and more, the number of showings on properties with conditional sales in place drops 90% or more.

…but what if the conditional sale does not “firm up”?

10-15% of conditional sales are falling through in our current market!
Given the current seller’s market conditions, extremely low listing inventory, offer dates and multiple offers, many more conditional sales are falling through than is usually the case.  Historically, conditional sales don’t complete only about 5% of the time but over the last 18-24 months this figure has grown to the point where as many as 10-15% of conditional sales are falling through! See the number of properties shown as being ” back on market”  in this recent 7 day snapshot from our Realtor dashboard.

See a previous post on why sales fall through here: http://blog.oasisrealtyottawa.com/conditional-sales-falling-like-autumn-leaves/

Property effectively “off the market”
Sellers will have missed buyers during the conditional sales period and there can be a bit of a stigma associated with a sale falling through.   Some buyers and their agents may wonder if there was some issue around inspection that surfaced to kill the previous deal, for example.

Both buyers and sellers should pursue showings:
A buyer may get a “leg up” on a such a property, should it fall through, as many buyers will have moved on and not be in a position to quickly get in to see the property, once it shows up as “back-on-the-market”  An aggressive buyer (and agent) may even want to submit an offer to show the seller their level of interest and if anything happens with the original buyer, they are then in a position to control the property. (still not a high % play, but if it is the “right” property, it may be worth the time investment.)

Sellers: be open to showings and keep the property readily available and accessible. 
We had an interesting experience recently where we booked a showing on a property that had been conditionally sold to find that snow had not been shovelled and the property was not accessible or safe for viewing.  Surprisingly enough, the conditional sale on that property fell through and it was back on the market a few days later. Also no surprise: our buyers had moved on a purchased something else in the meantime.

So while it is normal to lose interest in doing showings post conditional sale, all parties are best to remember “it’s not over ‘til it’s over!

Gord McCormick, Broker of Record
Oasis Realty Brokerage
613-435-4692              oasisrealtyottawa.com

 

4 hidden MLS listing sections buyers and sellers don’t get to see

Our MLS listings are very detailed and provide lots of opportunity for complete disclosure of information that is pertinent to buyers.  Like all things however, the quality of the listing is only as good as the quality of data input by the individual Realtor.  Also, a lot of brokerages don’t do a terrific job of oversight or quality control on their listings but this is a matter for another post.

What we do wish to discuss here, are the sections of the listing that can be very useful for a buyer to know and can also be critical to the success of the listing, as well as the buyer purchasing decision.

Here are some of the key sections of the listings that buyers don’t see:

Realtor remarks:
This short section allows the listing agent to detail ancillary information like listing conditions, closing date preferences, utility costs, special instructions, special assessments, rental items or lease obligations or other notes that are generally directed to the Realtor members but almost always are pertinent for buyers as well.

CTSO:
This is the acronym for “Commission-to-selling-office”.  This is critically important and both buyers and sellers should know what is contained in this small section.  This section tells the buyer agents what % commission is being offered on the listed property and may be the most important hidden section of all, since it speaks to compensation.

Many sellers don’t understand what is posted there for their listing and what effect it may have on a buyer agent’s enthusiasm for that listing.  Also, FSBO sites or “mere posting”   listings often show $.01 in this field with instructions in the Realtor remarks to contact the seller directly to understand what commission they are offering or not.

Buyers need to know what is shown in this section, as they may be liable to pay directly any difference between their contracted commission rate in their Buyer Representation Agreement and that offered by the specific listing.  While most commission rates to the selling office are 2.5%, they can vary widely.  Government relocations for example may be seen at only 1.85%.  Some brokerages offer 2, some 2.25 and some do a flat fee  commission amount for as little as a $3,000 commission to the buyer brokerage and representative.

Sales History:
The sales history section of the listing is very critical for buyers to see (and also sellers, prior to listing time) as this documents the current sales activity and most previous MLS® listing history.  It can be useful for buyers to know how long the property has been on the market and also what the previous sales timelines and results were.  For example, if a property had some kind of stigma, unique feature or location disadvantage and it took a long time to sell during previous listings, the odds are the same will be true again.  This buyer should try to remember this when calculating an offer price and also remember it in future when their turn comes to sell the property.

Noting when price changes or conditional sales have occurred is also relevant information contained in this area.

Listing attachments:
Our Realtor system has a feature that allows us to any number of attachments to the listing to provide further information such as floor plans, surveys, lease agreements, work orders, permits, upgrade lists, pre-listing home inspections, property appraisals, tax bills, maintenance records/history or any other pertinent record that helps the buyer representative better explain the home features and history to the prospective buyer.

This attachment field is not as well used as it might be, but more and more we are seeing useful and detailed information being added by the most conscientious and professional listing agents.

Both buyers and sellers should be asking their respective agents if there is pertinent information in any of these fields that are pertinent to their decision making.

Follow us on social media for more buying and selling tips and news on Ottawa real estate.  https://www.facebook.com/oasisrealtyottawa/  @OasisrealtyOTT

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

buyer tips for tough 2019 seller’s market

With listing inventory at millennium lows (-25.3% vs 2017 and -42.5% below 2016 levels at year end 2018) it is more important than ever for Ottawa buyers to have a strong team in place and a plan for success in 2019.

Have an updated plan:
Make sure you have a plan and update it, if one is up to date with everyone on your buying team then a purchase will definitely go more smoothly with fewer surprises:
Here are just a few things to do to be ready for that dream home:
If you have been looking for a home for a while, it is also a good idea to revisit and update your plan.
-check with your mortgage broker to make sure there is no change in your prequalification level or mortgage rate and see if you can get a rate hold guarantee
-review with your mortgage broker whether a fixed or variable rate is best for you.  70% of mortgages are still fixed rate but variable has been most advantageous over the long run.  Understand the pros and cons for each and plan based on what works for your circumstances.
-speak with your lawyers office and make sure you are up to date on all fees, and other disbursements the lawyer will make on your behalf, including land transfer tax (LTT), title insurance, mortgage insurance (if less than 20% down)
-check with your insurance broker, so you know what information they will require to provide appropriate insurance coverage and if there are any potential issues with a  property under consideration.

Price range:
If you have not been successful in finding an appropriate property, do you need to bump your price search range up to a higher level?

Focus on specific housing type:
Have you evaluated all options in potential housing and narrowed down your criteria to those that suit best?  There is an old saying that home buying is as much a matter of elimination as it is of selection and this is quite true.  The more one can focus on the type of house they are looking for within their financial plan, the better

Geography:
-do you need to add to or subtract from your geographical area of search?  Again, the more focused one is on a particular area or region, the easier it is to stay on top of new listings.

Are partners on the same page?
Being one the same page with a spouse or partner is critical in a successful home purchase.  If there are differences of opinion, try to get these ironed out before you start seeing homes and making offers.  If priorities are too far apart, getting a successful deal done will be painful.

Do you have your buying team in place and up to date?
Do you have a mortgage broker? Realtor? Lawyer? Inspectors? Does your financial planner need to be in the loop?  Are they all available right now if your dream home gets listed tomorrow?

How are you funding the down payment and deposit?
First time buyers will want to review this, especially if these funds are coming from an RSP or TFSA.  Typical deposit on a deal is about 1% of purchase, so $3,000-$5,000 paid at time of sales agreement for the average priced property.  Buyers may wish to offer more though, if they feel it adds strength to your offer, particularly in potential multiple offer situations.

Builder new home deposits are much higher, generally in the 10% of purchase price range, although buyers will have about 60 days to provide these funds in installment payments.

New construction vs resale:
If you are considering a new construction purchase, please make sure your Realtor knows, as they can help immensely in co-ordinating visits and providing advice on lot selection, features, upgrades and builder recommendations.  Realtors are involved in 85-90% of resale transactions but probably only 25%-30% (or less) of new construction transactions, so many of these buyers are purchasing without anyone directly representing them.  (…kind of like going to court without a lawyer…)

Multiple offers and bully offers?
Have a strategy for dealing with multiple offers or “bully” offers.

With our low listing inventory environment, these types of situations occur more frequently, especially for those shopping in the $250-$500K range.  Understanding how these work and determining if and how you will participate, is good to discuss in advance.

Be an ‘active” buyer:
-keep an eye out for new For Sale signs in your area of interest.  Especially look for those that say “coming soon…” or “Exclusive Listing” as these will not immediately appear on MLS® and may even be sold prior to an MLS® public listing being posted. Give your realtor the name of the listing agent and the address of the property and they can follow up for you and get you in to see the property.
Ditto, watch for online postings in facebook groups or kijiji or other online real estate sites that may show listings that have not yet made it to MLS®.  Some buyers and agents are advertising future availability, too and while these can be tricky and not that often successful, they may well could be an opportunity.

Be aggressive and decisive: don’t fret overpaying
Don’t wait for an open house, try to get in to see a newly listed property as soon as possible.
If you have a good market knowledge and see a property that ticks all your boxes, be ready to make a decision and go for it.  Many buyers can be a little nervous about overpaying but remember that if our upward market continues, this property is likely to be worth $20-$30K more next year and you want to get in to the market as soon as possible.  Your Realtor will help guide you in appropriate pricing strategy.

2019 is expected to be another challenging year for buyers, so have a good plan and work closely with your Realtor for success this year.  If you do not already have a Realtor, we strongly suggest you engage one now to improve your chances in finding and securing your dream property this year.

We would be happy to discuss if our approach and philosophy is appropriate for you, if you would like to discuss, please give us a call at 613-435-4692 or check us out at oasisrealtyottawa.com or our facebook or twitter platforms @oasisrealtyOTT or https://www.facebook.com/oasisrealtyottawa/

Gord McCormick, Broker of Record
Dawn Davey, Broker Oasis Realty Brokerage
oasisrealtyottawa.com

Key questions for Ottawa real estate 2019

Will mortgage rates continue to rise?
Rates have been creeping up but it is hard to say what we may see in 2019.  Another .25% probably wouldn’t hurt the real estate market too much but anything beyond that will certainly have an impact, when one also considers the mortgage stress test provisions.

 

Will listing inventory stabilize/improve?
We have seen very low listing inventory conditions throughout 2018, making life difficult for buyers and their agents.  Will this continue in 2019?  The number of new listings has flattening out somewhat in latter 2018 so we are not falling further behind on listing inventory but this will continue to be a critical factor.

Builders have had very strong sales in both 2017 and 2018, so it is possible there may be a backlog of resale properties to hit the market, once these new home (or condo) buyers are getting closer to taking possession of their new properties.

At what pace will prices grow in 2019?
If there was an anomaly in our market in 2018 it is the fact that resale prices did not increase as much as they might have, given the low listing inventory and supply/demand imbalance in favour of sellers.  The average residential selling price was up 5.1% to $446,415 through the end of November and the average condo sold for $278,330, up 2.8% vs last year.  Nice improvement but not the runaway sellers’ market some of the headlines would suggest has been occurring.  It is possible that the balance of sale % shifted towards lower price condos and townhomes which could have the effect of buffering overall % selling price increases.

What government action could impact our market this year?
Potentially long list here, with a Federal Government election pending, a new Provincial government in Toronto and a new city council in Ottawa.

Ottawa employment and general economic activity should be pretty stable with the current government or a minority government post-election but all bets are off, if a fiscally conservative government gets elected on a promise to balance the Federal books.  This would result in Ottawa government and private sector job losses and would chill the housing market.

Our biggest concern is what the Provincial government may do in terms of downloading, should Premier Ford decide it necessary to try and get the disastrous Provincial books in order.  Delays or cancellations to funding big projects like LRT2 or other infrastructure projects (Civic Hospital, Library) all could take a bite from the local economy.

Is MLTT coming this year?  We are fully expecting that at some time in the next couple of years, the City will join Toronto in the implementation of the Municipal Land Transfer Tax (MLTT), as this would add up to $150 million annually to the city tax revenues, without impacting most taxpayers.  Since only 5 or 6% of homeowners buy or sell each year, it is almost the perfect tax, since those not concerned with buying or selling are less likely to get hot and bothered over this type of tax.  The impact of an MLTT would be pretty significant for a buyer:  on an average residential property this would mean an additional Land Transfer tax (on top of the existing Provincial amount) which would total $10,950 for the buyer of the average $450,000 property and $18,950 for the buyer of a $650,000.

This tax has been in place in Toronto for almost a decade now, without destroying the Toronto real estate market and generating something like $800M a year in tax revenue, so don’t be surprised if this is coming our way!  When you think about it, the revenue from such a tax would almost be enough to be able to offer free transit or at the very least, half price transit which would help boost declining ridership.

Will LRT be a success?
The long awaited LRT will be pretty exciting but also nerve wracking in 2019. How well the system launches and is accepted by commuters will have an impact on the “transit oriented development” meme and developer plans/timing to populate high density condos and rentals along the transit route.  If we don’t see ridership meet projections then many things could change or be delayed.

What now for Lebreton?
The recent gyrations at Lebreton Flats and the poor sales to date at Zibi, may simply be indicative of the market overall appetite for high end urban condos but there is no question that the recent “failure to launch” will slow sales of any project in that immediate area.  After all:  who wants to plunk down a pile of dough for a condo that may get built in 3 or 4 years, next to you-don’t-know-what?  We think most consumers (and their realtors) will be hesitant to jump headlong in to pre-construction purchases, given the Lebreton saga and current status.  Unfortunately, we can’t expect the Feds to be too engaged on this file going in to an election, especially with a new Chairman at the helm of the NCC.

Bottom line:
Short of any major worldwide economic event, we see another pretty good year ahead for Ottawa real estate, despite the “cooling” reports you may be seeing throughout the national media.  Real estate is very local and all indicators look pretty good as we open the doors for 2019.  Our view is that those considering plans will want to move on those sooner rather than later, as prices continue to rise.  It is never too early to start both buying and selling plans and getting your Realtor team together, is always a good start!

Best wishes for a happy and prosperous 2019!

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

Findlay Creek bungalow and a heck of a listing deal!

New construction bungalow in Ottawa Findlay Creek MLS 1126904 $669,527

Builders have been racking up sales records for the last 2 years or more and possession lead times are growing for buyers.  One great option for buyers is to consider builder “quick occupancy” homes, spec homes, model homes or other inventory homes and your Realtor can help you shop for these.

We have a fabulous bungalow listing in Findlay Creek (MLS 1126904 at 602 Rockrose Way $669,527) that offers the best of all worlds: a relatively short delivery window (26 weeks) for a brand new construction home.  This home is built to the drywall stage and the exterior is complete, including sod, driveway paving and partial fence.  Designer upgrades have been ordered as of Jan 18th, 2019 and include over $68,000 in upgrades and extra features (ie AC) These should be installed an the property available for possession late summer.  This would allow a buyer to sell an existing property in the peak spring market.

For additional listing details and photos, please check out the MLS® listing here: https://oreb.mlxmatrix.com/matrix/shared/JwDGzRm50m/602ROCKROSEWAY

Another bonus of this buying approach, is that construction is essentially completed on this street, so buyers are getting to move in to a finished block without the inherent annoyances of ongoing construction.

In a seller’s market with limited inventory and upwards price pressures, those buying new construction can tend to benefit from both their existing property and their new construction property appreciating in value, as they wait for the new home to be built.

Best listing deal in town if you buy this home with us!
Buy this home directly with our firm and we will sell your existing property for only 2.5% +hst total commission!  (not intended to solicit those with existing representation agreements, some conditions apply)  This saves the average seller in Ottawa over $12,500 in commission and HST, compared to a typical 5% MLS® listing fee program.

If this particular home is not the right one for you, then we are happy to help find that dream home in 2019 and also optimize your equity proceeds from the sale of your existing property.

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

 

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

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