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

 

 

 

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

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

 

 

 

 

 

 

Conditional sales falling like autumn leaves

As most know, we have a seller’s market here in Ottawa as we close out 2018.  Sales and prices are up and listing inventory is pretty scarce in most market segments.
One statistic that seems almost out of line with the strength of the market and lack of listings is the number of conditional sales that are terminated by buyers and do not go firm.

The numbers: (such as are available) 
We don’t have a regular report mechanism on the amount of such sales but for the last 12-18 months, this ratio has more than doubled from 4-5% of sales to as much as 10-15%.  We offer as evidence a current 7 day period where new listings have been 406 and conditional sales 304 and firm sales 370.  The number of “back-on-market” listings during this period is a significant 74 or almost 20-25% in relation to the sales.  This is extraordinarily and we feel the overall level is probably in the 10-15% range noted previously.

So what is causing this massive number of sales cancellations?
There are several reasons why sales fall through in any market, these including: Inspection, financing and good old fashioned buyer remorse.  All 3 of these factors are enhanced in the current market.

Inspection:
Sellers feel they are in a strong position in this sellers’ market, so may not be as amenable to making price adjustments or fixing issues identified by inspectors, knowing there are a lot more buyers out there for their home.

Buyers accordingly, are often buying at their maximum and often feel they are paying a premium (even over paying) and therefore, some may try to renegotiate the deal price wise, without reciprocity from the seller.

Financing:
Mortgage rates have risen and the new mortgage “stress test” may still be catching some buyers unawares thus resulting in buyer inability to obtain satisfactory financing.

Hurried purchase decisions:
Buyer remorse can always be a factor in the termination of conditional sales.  Often caused by either irrational enthusiasm by one or more of the buyers or most likely where one buyer loves the property and the other merely likes it.

In the current environment of listing scarcity and multiple offers, buyers don’t get as much time to research a property (many only get a chance to see it once, before having to decide on an offer) and then once they have longer to think about it, they are not as enamoured with it as originally thought.

Unfortunately, a hasty purchasing decision in a rushed and stressful environment, leaves plenty of room for error and many buyers may be re-thinking the suitability of the property or re-evaluating the purchase price being paid or both.  Conditional sales agreements are written in way that favours the buyer significantly and that conditional period can often end up being a “cooling off period” and buyers can be pretty subjective in their decision making on whether to firm up the deal or not.

Sellers are adversely affected by such cancellations, as they may lose some of the other buyer interest during the conditional sales period when their property is pretty much “off the market” while a buyer does their due diligence and attempts to complete their conditions.  Other buyers may wonder if “ something is wrong” with the property and may therefore lose interest in it.  Still others may have gone on to buy something else.

The best solution to this problem is for buyers who are well prepared and well coached with appropriate financing in hand and a good knowledge of current market value.  If all of these are in place, we can hopefully optimize the current high level of sales cancellations.

Gord McCormick
Broker of Record
Oasis Realty Brokerage
Ottawa  613-435-4693
oasisrealty@rogers.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.

 

 

Is Ottawa real estate really as “hot” as everyone thinks it is?

Ottawa real estate has posted solid results over the last 2 years but is it really as “hot” a market as is often portrayed?

Both buyers and sellers should beware of headlines, myths, legends and Realtor marketing which can tend to obscure reality and create unrealistic expectations.

Let’s start with some facts, based on 3rd quarter 2018 results and see how this jibes (or not) with some market perceptions:

Unit sales year to date:
Residential sales are very flat this year with units sold up only* .3% in the first 9 months of the year.  Condo sales meanwhile (though a much smaller #) are up strongly at 15.1%
*There is a school of thought that says the low residential unit sales increase is due to listing inventory limitations and there is some truth in this.

Prices:
The average price of a residential property sold in Ottawa this year is up nicely by 5.2% to $447,427.  The average condo price is up only 2.3% to $278,401.

Good solid numbers but not exactly runaway sellers’ market results, right?  So why is it that if asked, many people would say we are in a “crazy” strong market and everything is selling quickly, with multiple offers and over list price sales?

Headlines and social media:
Clickbait headlines and search word worthy social media posts and videos tend to be as dramatic as possible, so quite often outlier examples ie one house in Barrhaven sold with “xx offers submitted and sold for xx,xxx over listing” tend to over influence the market reality.

Also, quite often, short term results, such as a single month sales report are taken to represent the overall trend which may or may be correct.  Sales or prices for a single month (or even 2) touting a runaway market may not be consistent with longer term results (4 to 6 months or more) and therefore skew buyer and seller thinking.

Realtor Marketing:
Realtor marketing is pervasive and hypes their individual results, focusing on the how many they sell and how quickly and for list price or better.  Again, giving the impression that everything sells in a just a few days on the market (or even before being on the market!) and creating an impression that this is the market norm.  We submit that the overall sales stats refute the common perceptions created by these Realtor marketing posts.  One high level Realtor marketer quoted earlier in the year that more than 50% of their listings were selling in multiple offers &/or over list price.  While this may have been true for a short period, there is no way this is true over the year to date results.  Unfortunately, such marketing claims can mislead consumers. * during that approximate period the Ottawa Board did quote a figure of 20% of properties selling at list price or above for that specific month.  Unfortunately, there does not appear to be an easy way to track this statistic, which is totally bizarre in 2018.

Listing inventory continues to be low:
Listing inventory continues to run much lower than over the last 5 years (currently residential inventory is 16.8% lower than a year ago and condo inventory is 28.2% lower)  These numbers certainly reflect a relatively thin level of supply but if it was truly drastic…wouldn’t the average selling price increases be much higher under typical supply and demand rules?

Builders recording huge sales increases over last 2 years: Part of the growth in the recent market has been a huge uplift in builder and developer sales of new construction housing and condos and only a small portion of these are sold via MLS listings, so this growth is not included in our market statistics.  Most of these new construction buyers also have a property to sell and these properties do eventually get to the public market via an MLS listing, so those pending listings arrive in the resale market 90 to 150 days before the new construction property is due for possession.

Grey market for listings:
There has been a long growing trend towards pre-announcement of listings by Realtors both as a marketing tool and an attempt to get a property sold sooner.  Everyone has seen the “Coming Soon” or “Exclusive Listing” sign toppers in their neighbourhood and these are examples of what we call the “grey market”.  Though an advance notice market may seem like a good idea, we think it takes away from the impetus and proper MLS launch of a listing but if it makes sense to that seller, then of course that is up to them.

Unfortunately, any sales recorded by these “grey market” listings are not captured by MLS and therefore not included in our Ottawa Board statistics, which may distort the overall sales picture. (in fact, it may understate results and average prices)

Summary:
Overall, our market is healthy and lower listing inventory still favours sellers-so this fall and winter should be among the best in many, many years.  One of the tenets of Ottawa real estate is that it is steady and stable without the large peaks and valleys, experienced in some other markets and we are better off for it.

We are in a relatively strong market but not a runaway seller’s market and we would be happy to provide detailed research for buyers and sellers appropriate to their individual situation.

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:
http://www.facebook.com/pages/Oasis-Realty-Brokerage-Ottawa/209265863918 

 

 

 

 

 

 

 

 

 

 

 

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

Moving to Ottawa in 2018? …here’s how to get ready:

 

It could be “slim pickings” for buyers in 2018 Ottawa real estate:

The Ottawa real estate market has been improving steadily since spring 2016 and 2017 was probably the best year in a decade, with overall unit sales up 10.2% and prices up 6.8% for residential properties and 3.4% for condos.

The good news is Ottawa is still very affordable compared to many places across the country and one of its most stable markets.

Average selling prices 2017:
Detached single home: $ 451,306   +7.6%
Row townhome:            $ 343,958    +4.9%
Semi-detached home:   $ 420,042    +5.7%

Apartment condo:         $ 298,537    + 3.7%
2 story town/condo:     $ 230,141    + 2.9%

Tougher news for buyers will be scarcity of listing availability in 2018 and definite upward pressure on prices, as listings have fallen to very low levels all across the city.

New listings were down 8.7% over the course of 2017 and that trend is worsening already in 2018 with new residential listings in January down 30% compared to the 5 year average. Overall listing levels are down 21.7% for residential listings at year end and 27% for condos.

With increasing numbers of sales and lower numbers of new listings, the supply-demand balance will be swinging even more in favour of sellers, so buyers will have to be very aggressive and prepared for a tough seller’s market.

Here’s some things to do to be ready to buy:
1) have your team in place, so you are 100% ready to buy: Realtor, mortgage broker, insurance broker, inspectors, lawyer.  Make sure you and your spouse/partner are on the same page concerning priority level of housing features.

2) know your financial plan and pre-qualification levels before even looking at a property. Know whether you will need a property appraisal and if the new 2% qualification threshold applies to your file. Understand home operating and utility costs, as this may vary from your existing geographic location.  For example:  property taxes may be higher or lower and ditto for heating, electrical or water costs.  Ottawa has much higher property taxes than Toronto per $ of assessment, for example and we also have rental hot water heaters which those from out of Ontario may not know.

3) have a realistic target of home by type, area, features and price and narrow that as quickly as possible. No sense chasing rainbows in a tough market for buyers.  Wishing you can get the $525K house for $475K will not make it so.

4) have a plan for multiple offers. Well priced new listings will be attracting multiple offers, so discuss your position in advance with your Realtor.

5) consider builder quick occupancy inventory, as many builders are building some homes on spec to be available for peak delivery months ie summer.

6) search online for exclusive listings and other non MLS® posted properties. Many are “trying” listings out on 3rd party sites and social media before posting on MLS®, so you may find listings on social media groups or via search engine alerts.

7) drive through your geographic areas regularly (if possible) to look for new lawn signs popping up. New ones may have toppers that say:  “coming soon” or “exclusive” listing.  These may be good choices if you can find them before other buyers.  The fragmentation of listings from the central MLS® system makes it difficult for buyer agents to stay on top of all new listings appearing in your areas of interest and one cannot be satisfied that electronic means will be sufficient in getting you in to see the hot new listings, before other buyers.

If we can assist with your Ottawa purchase plans this year or answer any questions, please do not hesitate to call 613-435-4692

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

https://twitter.com/OasisrealtyOTT https://www.facebook.com/oasisrealtyottawa/   http://blog.oasisrealtyottawa.com/

 

How overuse of exclusive listings undermines MLS®

 

Given our existing low listing inventory situation, many Realtors are convincing their buyers to “try” an exclusive listing to sell their property. While anything a seller and listing agent choose to do is up to them, it does have some consequences for the overall market, including that particular seller.

These exclusive listings are often flagged with sign toppers that say “exclusive listing” or “Coming Soon…” and we believe many listing agents wish to cash in on the listing scarcity for their own marketing and prospect generation purposes. What better way to entice a buyer to contact them than to offer something they may not be able to access otherwise?

Seller cannot be sure they actually get full market value for their home/property:
Selling to a small subset or “VIP” audience of buyers does not necessarily generate a full market value offer. Full market value can only be obtained by the widest possible exposure of a listing to the full MLS® market over time and this does not happen with these grey market listings.
The bottom line is that if the seller is happy with the price they get…then so what? …but just like the seller who sells quickly and then wonders “ should I have listed higher?” the exclusive listing seller may wonder the same thing.

No oversight on “exclusive” listings:
These listings are not on MLS® and therefore not subject to the extensive policies and processes administered by our Ottawa Real Estate Board to ensure fairness and equal access. The Board has no authority to investigate such listings and the 63 pages of OREB MLS® rules do not apply, so though not probable-abuses are possible.  Ie. Might a listing agent choose to give preferential access to their exclusive listing to their own buyers?  Or to their own small circle of Realtor friends or preferred Realtors?  One of the reasons MLS® works so well is that it is available to all 3,000 plus Ottawa Realtors and their buyers with equal access.

Loss of listing inventory may artificially inflate demand in the MLS® marketplace:
Further limiting supply in the listing starved MLS® market, will only enhance demand and potentially push prices higher. Our Ottawa market has been successful over the years by being steady and not as subject to the peaks and valleys of some of our Canadian neighbours.  Spiking demand and driving prices up to double digit increases, risks a longer and flatter market when demand eventually does level off.

Loss of listing data hurts buyers, sellers and Realtors:
By selling a property on the open non MLS® market, the MLS® system gets no data capture from that transaction and that information cannot be used by future buyers and sellers (and their agents) to assess their own buying and selling plans. MLS® data (and photos!)  is critical to helping the marketplace judge what market value should be and losing out data makes that process more difficult.

Searching listings for buyers is a real challenge in this marketplace and the more places a buyer or buyer agent has to sift through to find new listings, makes the search process that much more difficult and frustrating.

MLS® listings should not be “old news”
If a large % of listings get advance marketed as “exclusive” listings for 2-4 weeks and then ultimately get listed on MLS® for full exposure then MLS® listings run the risk of being deemed “old news” which is not good for the credibility and integrity of MLS® as “the” place to go for new listings.

Just because you can, doesn’t mean you should:
Just because online marketing and social media presence make it easier and more immediate to market properties today than in the dark printed past, doesn’t mean one should short circuit the central MLS® system.

While many coin operated Realtors may choose to find the shortest, quickest way to a closing and a commission cheque, most will realize that continuing to utilize the MLS® system and protecting its integrity, is still the best way to market listings. Trying to short circuit the system for marketing advantage ultimately weakens our MLS® system and makes losers of us all.

Why is the listing agent proposing an exclusive listing?
We are clearly not in favour of the widespread use of exclusive listings and we certainly didn’t see too many of them when we had a buyers’ market back in 2015 or 2015. So most sellers should have the discussion with their listing agent and try to really understand what it is they are selling and why.  Ultimately, whatever seller and listing agent agree is fine but both parties should be aware that they could be missing out on “top dollar” by not marketing the property first on the full-fledged MLS® system where all buyers and their agents can easily find and consider the property on an equal access basis with well-defined policies and procedures in place.

If you wish to discuss this or any other residential real estate matter with us, we are happy to do so! Feel free to give us a call at 613-435-4692.  You can also follow other items of real estate interest on our website, blog and social media below.

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

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

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