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

 

 

 

 

 

Is there a shortage of quality listings in Ottawa real estate?

 

It wasn’t too long ago that buyers had the upper hand in Ottawa, as we were saddled with excess listing inventory, flat sales and very low average price increases. It is looking like 2017 may be a whole new ball game though and we may be in the first stages of another seller’s market, which we have not had  for at least 5 or 6 years.

2016 was a transition year:
Between 2013-15 we experienced a period of excess listing inventory which combined with flat sales and price increases, created a market favouring buyers in general. (Although some high demand urban neighbourhoods may not have experienced this quite as much)

Starting about a year ago, we have seen unit sales improve consistently and though prices have remained fairly flat until recently, the number of new listings and overall listing inventory has decreased steadily…a good sign!

Overall listing inventory right now: (early March 2017)
Our current available listing inventory is well below (20%) some peak levels experienced in 2015 and new listings continue to lag behind by approximately 10%. Unit sales improved in 2016 and currently seem to be improving further.   As these trends continue, we end up with a supply/demand shift favouring sellers and more competition among buyers for fewer available listings.

“Chronic”, overpriced, stale or unique listings:
There is always a certain percentage of listings that fall in to this category and these lower demand listings are bypassed quickly by most buyers. Though these listings are shown in overall “available” listings totals, they are not in high demand, regardless of the improved overall environment.

One buyer example:
In doing a search for a current buyer, we found the following out of 31 listings that met their general specifications:
Chronic listings on the market for extended period: 9 listings or 29% (anything beyond 90 days we consider chronic which means either the property has a problem and/or is overpriced.)

Busy street or other location issue: 7 (this young family does not want a primary or secondary collector street)

Unique listing or one with an obvious issue: 5 (not looking for a fixer upper or one with has obvious resale challenges in future)

Total: 21/31 listings or 67.7% of available listings are not viable for this particular buyer couple, leaving only 10 properties to consider. So while there might seem to be a fair number of listings, there really is not for these customers.

As it turns out our buyers have submitted an offer on one of these properties but it looks like it will be their 2nd go round in a multiple offer situation, in as many weeks.

New listings sell fast:
The sell through of new listings at this time of year is 50% or more of new listings selling in less than 30 days, so buyers don’t have a lot of research and decision making time. Being prepared and having a well prioritized search can really help ensure one is ready to jump on new listings, as soon as they happen.

Bottom Line:
There is not a major shortage of overall listings (a la Toronto) but the demand for quality listings is improving and in many cases,  greater relative to supply, so buyers and their representatives need to be on top of their game or someone else will beat them to the hot new listings hitting the market.

Having a Realtor buyer representative fully engaged in one’s search is even more critical at this busiest time of the year.

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

www.oasisrealtyottawa.com   oasisrealty@rogers.com

One of the highest ranked and “liked” real estate pages:  https://www.facebook.com/oasisrealtyottawa/

“all the real estate news that’s fit to tweet”  https://twitter.com/OasisrealtyOTT

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

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Will it be a “balanced” market or a “seller’s” market in 2017?

OLYMPUS DIGITAL CAMERA
Lots of these in Ottawa January 2017
Listing inventory is trending down which may indicate a market favouring sellers
Listing inventory is trending down which may indicate a market favouring sellers

Though January is typically the lowest sales month of the year, (along with December) there are some very positive trends in the current market.

Strong residential sales in January 2017:
Unit sales have been trending up steadily since April 2016 and January continued that trend. Unit residential sales were up a solid 16.6% for the month and overall residential and condo sales were 8.6% higher than the 5 year average for January.  Condo unit sales were flat in January but did sell at a higher price than a year earlier.

Listing inventory trending down:
This is a key category and indicator of overall market activity. We experienced several years (2013-2015) of increasing inventory levels which led to a supply/demand imbalance favouring buyers.  Starting in spring 2016 this indicator started moving in the opposite direction and moved in to a balanced position during 2016. See chart:
https://public.chartblocks.com/c/5895b4b79973d295631e48dc via @chartblocks

January 2015 listing inventory is 15.2% lower for residential listings and 10.7% lower for the number of condo listings, compared to a year ago.
New listings in January were 11% lower than a year ago and condo listings for the month 4.6% lower.

Balanced market or seller’s market?
If we continue the combination of higher unit sales with lower numbers of new listings and total listing inventory, then we may see more pressure on buyers and higher prices and move more towards a seller’s market.  This is what can occur when demand outstrips supply and can be characterized by shorter selling times, higher prices and the existence of more multiple offers on listings.  We have not had sellers market conditions (except perhaps at a neighbourhood level) for 4 or 5 years now, here in Ottawa.

We have also had reports of strong sales from builders on new construction and inventory homes.

Prices:
Overall average prices are not leaping forward, as has been the case for the last number of years but the trend suggests this could change if supply limitations drive prices up.

Bottom Line:
This is a very important time of year for both buyers and sellers, as market activity grows on a daily and weekly basis from now through peak season in May and June, so it is a good idea to get one’s plans in place and existing properties ready to sell.

These overall numbers may not apply to all neighbourhoods, so if you would like to get an analysis done for your own property or area, feel free to give us a call or call your Realtor. 613-435-4692

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

One of the highest ranked and “liked” real estate pages on facebook:  https://www.facebook.com/oasisrealtyottawa/

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

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

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Key issues for Ottawa real estate 2017

6723-ptw-summer-aaaThe New Year brings optimism and while we expect another pretty good year in Ottawa real estate there are still a lot of questions and issues that will shape our marketplace and affect buying and selling plans. Here are a few we think worth watching:

Listing inventory levels:
We had a positive turnaround in 2016 with fewer new listings and total listing levels, after a couple of years of historical records and bloated excess listing inventory . This helped get the market back to a “balanced” market territory in 2016 but just barely.  Positive unit sales growth would continue this improvement but a small slip could put us back in buyer’s market territory.

Mortgage rates and qualifying rules:
While there is no reason to suspect significant change in mortgage rates, the mortgage rules and new qualifications may delay first time buyers entering the market. The 4.64% mortgage qualifying rate (vs market rates approx. 2% lower) makes the approval threshold higher for buyers and if this source of new market entrants slows, then “move up” sellers have fewer prospects for their property.  Further government moves may also impact the market.

How long does it take the average house to sell?
This is another key indicator on the health of the overall market and it has been going the wrong way for several years now. 2016 (November) year to date the average home has taken 55 days to sell and the average condo 70 days. These compare to 34 days and 27 days, as recently as 2010.
Chronic listings have taken even longer to sell and our newer indicator for CDOM (cumulative-days-on-market) currently stands at 85 days for residential and 112 days for the average condo sale.

New home construction activity and performance:
New home sales were up 15-20% during 2016 after an “off” year in 2015…will this continue? Will this cause a backlog of new home buyers with existing homes to resell thus inflating competition in the resale market?
Many of the marquis new developments are inside the Greenbelt in places like Ottawa East (Greystone), Zibi/Lebreton and Wateridge (former Rockcliffe base). Will these higher end developments draw buyers in sufficient numbers and will that impact suburban sales?
How will the condo market perform in 2017? We have no shortage of projects…are there enough buyers?
With a lot of purpose built rentals coming in the future, (i.e. Lincoln Fields/Westgate/Elmvale), will these challenge investor buyers and owners with increased competition in the rental market?

How will governments impact our market this year?
We are a government town and it is no surprise that our market perked up with the 2016 fiscal year starting in April last year. After several years in the doldrums and tight Federal spending, we had increased spending and headcount and a positive environment with the new government which contributed to improved results.

The provincial and municipal governments have been pretty supportive too; abandoning some measures (increased land transfer taxes, higher development fees) and lots of cash for major infrastructure (LRT, sewer upgrades) and general maintenance.
The Province has upped the land transfer tax rebate limit for first time buyers to $4,000 from $2,000, so that is a plus for 2017.
Will the Feds take further action nationally to attempt to “cool” the super charged Toronto/Southwestern Ontario market? Will the federal National Housing Strategy complicate the nature of local real estate?

Will the Province bring in the long awaited Home Energy Rating and Disclosure Program this year? This program will force home energy audits prior to listing a home for sale and the “energy score” will be published on MLS® listings.  This may hurt older generations of homes/homeowners and result in market challenges for these sellers.

Will ongoing increases in utility costs negatively impact some homes/properties more than others?

Higher utility costs are felt most by the 45,000 Ottawa area homes serviced by Hydro One, so will further increases impact sales for these homeowners?

Will the Province and/or the Feds follow BC’s lead and create a matching interest free loan to help first time buyers?

Will our market roar ahead to catch up with much higher price valuations in the rest of southern Ontario? Ottawa has not been participating in the house price increases of other major centres in Ontario over the last 4 or 5 years.  Could this be the year we play “catch up”?

Our take:
We don’t see a lot of new significant or contentious action from either Provincial or Federal governments, as both await the outcome of the Cap and Trade/Carbon Tax program and the host of new mortgage rules. Federal funds should continue to flow and we can see some slightly better average price increases but still probably only inflation level or slightly better.

If you do not have a Realtor helping with your buying/selling plans, now is a great time to sit down and plan, as peak season starts in only a few weeks!   If you do not have a Realtor, feel free to give us a call! 613-435-4692 or follow us on social media to keep an eye on Ottawa real estate…it should be an exciting year!

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

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

@oasisrealtyOTT

http://blog.oasisrealtyottawa.com/

Could Ottawa real estate be poised for a breakout year in 2017?

925-plante-sold-1With renewed local confidence and lots of government activity at all levels, 2016 was a turnaround year for the local real estate market and many key indicators suggest we could be in for a great year in 2017.

Positive key indicators:
Unit sales growth:
Unit sales improved by 6.3% overall with residential sales (which is 81% of the total units) increasing by 5.5% and condos coming in with a welcome 9.6% unit sales increase to the end of November vs the year before.
New listings:
The number of new listings decreased by 7.4% in the first 11 months of 2016 and this certainly helped move the supply/demand balance closer to a balanced market and away from some historically high inventory levels (and buyer’s market conditions) 2014 and 2015.
Current listing inventory at year’s end is about as low as it has been in 4 or 5 years and this is a very positive sign, unless there is a backlog of chronic listings that sellers have carried over the winter and will relist in spring.
Builder new construction sales:
The last report we have seen suggests that builders have had a good bounce back year and have recorded a sales increase of 15-20% which is great news, although may be influenced by a larger number of new projects coming online and adding to the sales numbers.

Neutral indicators:
Overall price increases:
The average residential property sold in Ottawa through November 2016 sold for $396,700 an increase of 1.2%. The average condo sold for $260,880 virtually unchanged from 2015.  These numbers continue the trend line in our market over the last 5 years where average prices have been mostly inflationary level.  These pale compared to the price levels and average price increases which dominate the news and online media that we hear about from Toronto, Southwestern Ontario and Vancouver but is simply a sign of our stable market and the fact that real estate is very local in nature.
Sales: new listings ratio:
Our sales to new listings in Ottawa through November 2016 stand at 40.9% by our calculation which is right on the borderline between a balanced market and a buyer’s market. (40-60% is considered “balanced” with lower ratios favouring buyers and 60%+ favouring sellers) With current lower levels of listing inventory this ratio should continue to improve and provide us with balanced market conditions in 2017.

Bottom line:
We are in the best position we have been in for some time and if sales demand continues or increases, we should see another positive year in 2017, although modest price increases are still most likely.

Lots of key factors to consider and there are many reasons why 2017 would be a good year to move on your real estate plans. Stay tuned for a future post on what may shape our market in 2017 and feel free to give us a call to discuss your own housing plans, 613-435-4692 as now is a great time to get a head start on a spring or summer sale.

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

For one of Ottawa’s best real estate blogs: http://blog.oasisrealtyottawa.com/
…or real estate facebook pages: https://www.facebook.com/oasisrealtyottawa/…or twitter: https://twitter.com/OasisrealtyOTT

 

Fed spending and headcount continue to hike home sales in Ottawa

925-plante-sold-1

…overall prices though…not so much!

October 2016 yielded another pretty good month in Ottawa real estate, buoyed by continued growth in Federal government headcount and spending. Sales were positive in the month of October with new home sales and condo’s leading the way.

New home sales up 18.5% year-to-date:
The new home segment has seen a major surge this year and that is good news for builders. Some of these sales may challenge the resale market which is pretty flat in average price this year, although the number residential units sold is up 6.0% so far this year. Average selling prices are ahead only .9% overall for residential at $396,109.

Condo sales much better this year, up 9.1%
Condo sales on MLS® (which also includes some new construction sales but not all) where up a whopping 27.2% in October and are showing a 9.1% increase year-to-date but average prices are again pretty flat with the average price sold at $259,925 unchanged.

Listing inventory pullback has helped the market:
The number of new listings this year is down by about 7% overall and current inventories show the number of residential listings down 16.7% at the end of October and condo listings down 14.1%.   Rental listings were also down by 28.9% at month’s end.
This has moved us away from some very high listing inventory levels experienced over 2014 and 2015 and keeps us in a much more balanced market.

How long does it take a property to sell in Ottawa?
Our days-on-market to sell the average property has increased slightly to 58 days for residential properties (up from 55) and 73 days for the average condo (up from 68 days last year). This is a key statistic for those considering a sale to study in detail for their own area, as it is critical in assessing both marketing timelines and listing pricing.  A Realtor can provide up to date and detailed information in this regard.

Most popular pricing categories:
The $300,000 to $400,000 price category is the most active/popular range, followed closely by the $200,000-$300,000 price category.
Overall, 80% of residential sales in Ottawa are done at lower than $500,000 and 75%+ of condo sales are done at less than $300,000. These types of ratios are important for sellers to consider when listing, as it determines the size of the potential market for their property.

What’s next?
We are entering the quieter period for real estate in Ottawa and while sales should continue strong vs previous years, the months of November-February are our 4 slowest months of the year. Sellers will want to carefully review pricing and competitive factors prior to listing their property for sale during this period.

Now may be best time to buy new construction for 2017 delivery:
Buying new construction may be optimal at this time of year for closings in summer 2017, as those with existing homes to sell, will be able to sell in the busy spring market.
First time buyers will have more months to save and also possibly be able to use their 2016 tax year RRSP contribution for their down payment, in addition to getting the 2016 tax break.

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