OREB Ottawa Real Estate Board Archives - Ottawa Real Estate Guide

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Stittsville real estate soaring through October 2019

Stittsville real estate outpaces market in 2019

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

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

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

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

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

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

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

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

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

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

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

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

Just how many Realtors do we have in Ottawa?

…and do we need this many?
There are just shy of 3,100 Realtors in the Ottawa Real Estate Board (OREB) at time of writing. This is one Realtor for every 322 residents in our City of a million population and one for every 129 residences in the city. (Based on 400,000 residences-an approximation)

This doesn’t count the Quebec side, as real estate is regulated provincially, so there is a completely different real estate market on the other side of the river.

If you think this sounds like a lot of Realtors, how about Toronto? The Toronto Real Estate Board (TREB) references over 53,000 members, serving the GTA and its 6 million plus population. This works out to 1 Realtor for every 113 residents or almost triple the concentration here in Ottawa.

What do Realtors think?
Most Realtors would agree that there are far too many agents, far too many part time or inexperienced agents and far too many poorly trained agents, doing 0-2 deals a year and just too many poorly qualified agents that reflect poorly on the industry as a whole.

Why are there so many agents?
Relatively easy access to industry and potential for significant income: The barriers to entry in real estate have always been relatively easy, with a suite of courses to be taken and minimum hurdles to pass and obtain registration to trade in real estate. The potential for significant income is available from day 1, too and does not necessarily require years of apprenticeship to realize an uptick in income.

This is helpful for franchise broker networks, too-as they need an ever increasing supply to agents to optimize their profits. Realtors are independent contractors typically on 100% commission and are highly mobile and quite often move from broker to broker or out of the industry. So while no Broker of Manager would say they subscribe to the “masses of asses” philosophy, there is certainly a need for brokerages to maintain and grow their headcount to remain profitable.

Population growth and geographic range:
Our population has grown and with that the number of homes, condos and commercial and industrial properties, therefore more professionals are needed to service this growth. Ottawa is spread across 2,800 sq. km and incorporates urban, suburban, exurban and rural areas plus numerous smaller villages and communities, many with their own somewhat unique real estate needs. This alone dictates a wide network of professionals is required.

Specialization:
The increasing complexity of the real estate marketplace and our geographic sprawl, has meant increasing levels of specialization for Realtors, in order to become experts in a particular market, be it geographic or vertical or by property type.

Volume of business:
Our business volume in Ottawa has grown significantly, doubling the number of residential transactions completed over the last two decades and given the labour intensive nature of the business, this necessitates additional personnel.

Service levels:
Buyers and sellers require a highly responsive and available Realtor on their team, so there are limits to how many clients and customers a Realtor can successfully engage at any one time.

Large numbers of Realtors paying fees keep costs down for all:
Given that Realtors are on commission, there is not a huge $ cost for a brokerage to carry a Realtor, and all have quota’s and franchise fees and other overheads to pay, so there is a bias to having more rather than fewer Realtors contributing to overheads.

Even those Realtors who say there are “way too many Realtors” benefit from the fact that their own fees are much lower when 3100 Realtors are splitting Board fees (for example) compared to what it would cost them, if there were only 1,000. But believe me, if these same Realtors had to pay 3x the fees for insurance, provincial and national association fees, provincial registration fees and broker splits…they would not be in favour

Demographics and diversity:
Internal migration and a wave of new immigrants to Canada, have both helped fuel Ottawa’s growth and also its Realtor population. Home buying and selling is often quite tightly aligned with cultural, religious, nationality, language or other demographic group and our Realtor ranks have grown significantly to reflect this.

Realtor population fluctuates:
Being commission based, the Realtor population can fluctuate widely. Though Ottawa is one of the most stable markets in Canada, we have had some historic highs and lows, brought on by adverse economic conditions. At the end of the 1980’s and what had been a very strong period for real estate, the Ottawa Board had 2,566 members…a pretty robust number!

This changed quite dramatically through recession and government cutbacks in the 1990’s, where the Realtor population contracted to only 1,341 members by the end of 1996…a 47.7% drop. It would take until 2009 to get back to the total membership number two decades earlier!

With low mortgage rates and continued growth in Government and high tech in Ottawa, the Board has grown from 2,547 at the end of 2009 to our current level of 3,078, though the numbers look to be pretty flat going forward.

Bottom line:
While there are certainly some good arguments for fewer, better trained and more professional Realtors, we believe that the fact that there is a healthy, thriving and robust Realtor and Brokerage industry is indicative of the health of the overall market and provides more choice and competition for consumers.

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