June's Residential Resale Market begins to Normalize

April's Real Estate Market Starts Strong and Sputters

Members of the Ottawa Real Estate Board sold 2,402 residential properties in April through the Board’s Multiple Listing Service® System, compared with 911 in April 2020, an increase of 164 per cent. April’s sales included 1,859 in the residential-property class, up 166 per cent from a year ago, and 543 in the condominium-property category, an increase of 155 per cent from April 2020. The five-year average for total unit sales in April is 1,830.

“As the typical spring market ramped up, April was poised to be the strongest on record with over 3,200 new listings of properties for sale. Most of these properties entered the market before the province’s stricter lockdown order was announced midway through the month. At that point, the trajectory sputtered, and while it continued to be active, it followed a noticeable decline as Sellers responded to the government’s resolution to reduce the spread of Covid-19,” states Ottawa Real Estate Board President Debra Wright.

“Nevertheless, the number of transactions managed to surpass unit sales recorded in previous Aprils, and we presume the figures would have been even higher in different circumstances,” she adds.

“As I had cautioned last month, the percentage increases over 2020 figures are vastly skewed due to the first State of Emergency last spring, which had initially slowed down the real estate market. Thus, the 155 to 166 percent increases in unit sales are simply not valid results. We recorded 2,026 sales in April 2019 and 2,024 in April 2018. These figures provide a more reasonable comparison, which is a 19% increase in overall sales compared to those pre-pandemic years.”

April’s average sale price for a condominium-class property was $427,145, an increase of 30 per cent from last year, while the average sale price for a residential-class property was $743,204, an increase of 42 per cent from a year ago. With year-to-date average sale prices at $734,682 for residential and $418,792 for condominiums, these values represent a 35 per cent and 20 percent increase over 2020, respectively.*

“These accelerated price increases boil down to a lack of supply and will continue to be a challenge for Buyers until more inventory becomes available – it’s fundamental supply and demand economics. Certainly, April’s substantial increase in new listings, 19% higher than the five-year listing average and over 400 units more than the previous month, gives us cautious optimism. When the Stay-atHome order concludes, we hope that pentup supply will bring some much-needed housing stock to the resale market,” suggests Wright.

“However, there are many factors at play which make it difficult to forecast the path of Ottawa’s real estate market: interest rate modifications, the skyrocketing cost of building materials, the Office of the Superintendent of Financial Institutions (OSFI) proposal to increase the mortgage stress test, changing consumer perspectives with some Buyers opting to move to outlying communities and Quebec, etc.”

“On the one hand, record low interest rates, increased household savings, a strengthening economy, and a continued focus on living space during the pandemic are all factors that bolster demand, while steady price growth is encouraging more Sellers to list their home.

On the other hand, some people are truly struggling and small businesses are closing their doors. It’s complicated, it’s out of balance, and the course of our local market is not entirely predictable at this time,” Wright concludes.

OREB Members also assisted clients with renting 1,458 properties since the beginning of the year compared to 947 at this time last year.

* The Board cautions that the average sale price can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The calculation of the average sale price is based on the total dollar volume of all properties sold. Price and conditions will vary from neighbourhood to neighbourhood.

Ottawa’s Resale Market “Steady as She Goes”

Members of the Ottawa Real Estate Board sold 2,146 residential properties in October through the Board’s Multiple Listing Service® System, compared with 1,604 in October 2019, a year over year increase of 34 per cent. October’s sales included 1,665 in the residential property class, up 38 per cent from a year ago, and 481 in the condominium property category, an increase of 22 per cent from October 2019. The five-year average for October unit sales is 1,515.

“We are heading into the colder months, the second wave of the pandemic is upon us, and yet Ottawa’s resale market continues to hold steady,” observes Ottawa Real Estate Board President Deb Burgoyne.

“While the October average price gains, number of sales, and new listings coming onto the market were all down from September, demand persists, and the number of sellers choosing to enter the market remains strong. With 1,937 residential listings and 708 condo units added to the housing stock in October, this is a 48% and 70% respective increase in new listings over last year at this time,” she adds.

October’s average sale price for a condominium-class property was $368,936, an increase of 16 per cent from this time last year, while the average sale price of a residential-class property was $603,253, an increase of 25 per cent from a year ago. With yearto-date average sale prices at $579,026 for residential and $361,666 for condominiums, these values represent a 19 per cent percent increase over 2019 for both property classes.*

“The condominium market is on our watchlist. Inventory for condo units increased 15% over last October, while inventory for residential properties is down 46%. This is an inverse relationship compared to the beginning of 2020 when condo supply was depleting much quicker than residential,” reports Burgoyne.

“The shift in the condo market occurred around June. There has been a lot of speculation about changing buyer behaviour and preferences due to our pandemic reality with homeowners wanting home offices and gym space, for example. One could extrapolate or conclude that buying preferences may be shifting towards a desire for properties with more square footage than this property type offers. Particularly, due to the sheer number of employees working remotely for the foreseeable future, commute times may continue to be less of an issue.”

“As the chillier weather and upcoming holiday season approaches, it will be interesting to see how the market calibrates. Typically, we start to see a slowdown in home sale activity. Whether that actually transpires is something we can’t predict given the topsy turvy year that is 2020. What I can tell you is that this is not the time to navigate the market on your own; there is too much at stake to venture in without the knowledge and guidance of an experienced REALTOR®,” Burgoyne concludes.

In addition to residential and condominium sales, OREB Members assisted clients with renting 2,829 properties since the beginning of the year compared to 2,334 at this time last year.

* The Board cautions that the average sale price can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The calculation of the average sale price is based on the total dollar volume of all properties sold. Price and conditions will vary from neighbourhood to neighbourhood.

What Will Homes Look Like In A Post-pandemic World?

A lot has changed in just a few months, and for many that includes the idea of what a 'dream home' looks like. Not long ago, buyers were showing preference toward smaller homes and open concept spaces conducive to gathering. After a few months cooped up inside, those features don't seem so appealing - and developers have taken note.

"While the coronavirus still rages on, it's hard to predict what post-pandemic abodes might look like," according to Barrons. "Yet, developers around the U.S. are already rethinking projects, anticipating residents' needs and preferences that Covid-19 would spur. In doing so, they are re-evaluating current in-unit aesthetics and in-demand amenities."

Here are just a few areas of home design where trends may shift in the coming years:

Home size
Homes had been trending smaller, but that may be over. With so many families spending (way) more time around the home lately, there's never been more need for personal space. Expect homes to grow in size accordingly.

Prioritizing the home office
As more and more businesses relax work-from-home policies, or shift to full-time remote work entirely, the home office will become a near-essential for many buyers. A space that was once an after-thought now will need to offer privacy, good lighting and be pre-wired for telecommuting.

Return to the closed-floor plan
For some buyers, the appeal of the open-floor plan was already trending down prior to 2020, and the past few months have only made the reasons why more evident. Sharing more time and space at home demands privacy for school work, hobbies, and entertainment. With more meals being cooked at home, an open concept kitchen becomes noisy epicenter practically all day long. Builders expect a rise in demand for closed floor plans, where rooms are partitioned for purpose.

Smart technology
This is already one of the fastest growing trends in home design, but smart home technology will soon move from a 'plus' to a 'must'. Temperature and lighting control can now be voice or motion-activated. Touchless faucets, once thought superfluous, are now an inexpensive and health-conscious upgrade. Systems that filter air and monitor air quality will become more common and affordable.

Thinking about making a move? Contact us today. We can help you to find the right place.

March Residential Resales Withstand Pressure of World Crisis

Members of the Ottawa Real Estate Board sold 1,525 residential properties in March through the Board’s Multiple Listing Service® System, compared with 1,507 in March 2019, an increase of only 1.2 per cent. March’s sales included 1,170 in the residential-property class, up 3.3 per cent from a year ago, and 355 in the condominium-property category, a decrease of 5.1 per cent from March 2019. The five-year average for March unit sales is 1,465.

“Our results show that the Ottawa real estate market seems to have withstood the pressure of a worldwide economic event in March, however in context with our market’s performance up to this point, we can see the underlying effect. Before the pandemic, monthly unit sales were increasing between 10-16% from 2019, while March’s sales were just on par with a year ago. This is an indicator that there has been a slowdown in the real estate market due to Covid-19.” reports Deborah Burgoyne, Ottawa Real Estate Board President.

“Much of March’s activity likely began in the first two weeks of the month before the State of Emergency order was put into place. In fact, we had a head start on the spring market that was heating up earlier than expected, but activity seemed to fall off as physical distancing measures took effect,” she adds.

“Once the Ontario State of Emergency began, our Members and Brokerages rightly began to make all adjustments necessary for the health and wellbeing of our clients and customers. We welcomed the government’s declaration of real estate as an essential service so that transactions in progress could be completed. However, it was not and is not business as usual for our Members. They are heeding government and public health authority warnings and advice and are being diligent in taking extra safety precautions. All this, while still doing their best to help their clients successfully conclude or close real estate transactions that were already in progress,” Burgoyne acknowledges.

March’s average sale price for a condominium-class property was $369,311, an increase of 27.3 per cent from this time last year while the average sale price of a residential-class property was $559,739, an increase of 16.5 per cent from a year ago. Year to date figures show an 18.8 per cent and a 23.2 per cent increase in average sale prices for residential and condominiums, respectively.*

“Our Members are evolving and adapting their business practices by leveraging the use of technology with virtual tours, live streaming, social media, and becoming more creative in their methods to facilitate the needs of their clients who may need to buy or sell right now because of their circumstances.”

“However, for those buyers and sellers who are not in that urgent position, our Members recognize the health and safety of our community is paramount. They are consulting with these clients on a case by case basis and may advise that they should delay the listing of their home or a purchase. They are doing what’s best for their clients in the context of government advisories,” affirms Burgoyne.

When asked about the impact of Covid-19 on the number of new listings on the market, Burgoyne speculates, “The shortage of inventory has driven down the number of new listings for the past several years, so we cannot accurately state that the decrease in March was due to Covid-19 where we saw 1,579 new residential listings and 469 for condos. The 5-year average is 2,217 and 665, respectively. I believe that April’s number will provide a truer and more legitimate reflection of the impact of Covid-19 on our local real estate market.”

“In closing, I would like to say that we are grateful to have been granted the essential service designation and are working closely with all levels of government and our provincial and national associations to ensure that we implement the necessary steps and protocols to flatten the curve and remain the trusted advisors that the public have come to expect from the REALTOR® profession.” In addition to residential and condominium sales, OREB Members assisted clients with renting 746 properties since the beginning of the year compared to 550 at this time last year.

* The Board cautions that the average sale price can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The calculation of the average sale price is based on the total dollar volume of all properties sold. Price and conditions will vary from neighbourhood to neighbourhood.

January Resales Lose Momentum

Members of the Ottawa Real Estate Board sold 780 residential properties in January through the Board’s Multiple Listing Service® System, compared with 817 in January 2019, a decrease of 4.5 per cent. January’s sales included 558 in the residential-property class, down 8.4 per cent from a year ago, and 222 in the condominium-property category, an increase of 6.7 per cent from January 2019. The five-year average for January unit sales is 713.

“2020 is off to a slower start as the shortage of inventory is now impacting market momentum,” states Ottawa Real Estate Board’s President Deborah Burgoyne. “Although we have higher sales than the five-year average, due to increased condo sales, the persistent supply challenges seem to have finally caught up with us. Furthermore, the number of new listings that came on the market in January (1,082) is well below the average (1,651).”

“We don’t expect this trajectory to change anytime in the foreseeable future,” Burgoyne acknowledges. “The supply chain needs to be buffered at all points along the continuum from first time and move-up buyers, to downsizing boomers as well as renters. They are all interconnected links in the housing chain.”

January’s average sale price for a condominium-class property was $338,077, an increase of 19.1 per cent from last year while the average sale price of a residential-class property was $516,229, an increase of 19.3 per cent from a year ago. Compared to last month, however, the average price for residential-class properties increased by a modest 3.2 per cent and the average price for condominium-class units was 8.8 per cent higher.*

The Board’s Housing Price Index (HPI), which is another data point of price trends based on the specific housing stock in neighbourhoods, indicates that the overall benchmark price for Ottawa has increased by approximately 13.75% from last year.

The most active price range in the condominium market was $200,000 to $349,999, accounting for 55 per cent of the units sold while $400,000 to $549,999 represented the most prevalent price point in the residential market, accounting for 40 per cent of January’s transactions.

“The fact is Ottawa’s market has always been steadily increasing at a reasonable pace and is sustainable. If buyers are waiting for prices to decline, based on historical trends, it’s not likely,” Burgoyne cautions. “Although supply may pick up eventually—if you need to get into the market, don’t wait. It’s a challenging market for everyone. Hire a trusted professional to ensure you are protected and well informed in your home buying or selling transaction.”

In addition to residential sales, OREB Members assisted clients with renting 243 properties in January 2020 compared with 169 in January 2019.

* The Board cautions that the average sale price can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The calculation of the average sale price is based on the total dollar volume of all properties sold. Price and conditions will vary from neighbourhood to neighbourhood

Record-Breaking 2019 Closes out Decade

Members of the Ottawa Real Estate Board (OREB) sold 761 residential properties in December through the Board’s Multiple Listing Service® System, compared with 660 in December 2018, an increase of 15.3 percent. December’s sales included 534 in the residential property class, up 13.9 percent from a year ago, and 227 in the condominium property class, an increase of 18.8 percent from December 2018. The five-year average for December unit sales is 720.

“December’s statistics reflect the same story we’ve seen all year - historically low supply yet higher unit sales than in previous years. Days on market continued to decline, especially in certain pockets of the city, as properties that came on the market were snapped up by prepared buyers,” states Dwight Delahunt, Ottawa Real Estate Board’s 2019 President. “Unit sales in the condominium class consistently led the way, offering lower price point options for homebuyers that simply weren’t available in the residential category,” he adds.

The total number of residential and condo units sold throughout 2019 was 18,622, compared with 17,467 in 2018, an increase of 6.6 percent. Residential property class sales went up by 4.7 percent with 14,038 properties exchanging hands last year compared to 13,411 in 2018. Condominium property class sales increased 13 percent with 4,584 units sold in 2019 versus 4,056 in the previous year.

“2019 was a record-breaker in both the number of sales as well as average prices, with the residential property class reaching $500K in several months during the year. This price growth is warranted due to the fundamental economic principle of supply and demand playing out, with limited supply putting upward pressure on prices. However, even with these increases, Ottawa’s real estate market continues to remain one of the most affordable and sustainable in the country,” Delahunt stresses.

December’s average sale price for a condominium-class property was $310,675, an increase of 11.5 percent from a year ago while the average sale price of a residential-class property was $500,306, an increase of 10.3 percent from December 2018. Year-end figures show an average sale price of $486,590 for residential class properties in 2019, an 8.9 percent increase from 2018 and $304,203 for condominium properties, up 9.3 percent from last year.*

OREB’s 2020 President, Deborah Burgoyne, forecasts Ottawa will continue to experience limited supply and reasonably increasing average prices this year. “Supply issues will surely persist into 2020, and I don’t expect the inventory will be able to recover in the near future,” she suggests.

“Builders do seem keen on constructing luxury rental units, which is something we haven’t seen much of before. These could potentially add inventory to the residential class, as boomers will have decent options if they are considering entering a different lifestyle than homeownership. However, even if supply increases, high demand has shifted market values upwards in various neighbourhoods and prices are unlikely to go back down – this is our new reality,” concludes Burgoyne.

* The Board cautions that the average sale price can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The calculation of the average sale price is based on the total dollar volume of all properties sold. Price and conditions will vary from neighbourhood to neighbourhood.

Weather Isn't Cooling the Resale Market

Members of the Ottawa Real Estate Board sold 1,288 residential properties in November through the Board’s Multiple Listing Service® System, compared with 1,161 in November 2018, an increase of 10.9 per cent. November’s sales included 958 in the residential-property class, up 10.5 per cent from a year ago, and 330 in the condominium-property category, an increase of 12.2 per cent from November 2018. The five-year average for November unit sales is 1,133.

“Even with the typical winter slowdown, Ottawa’s home resale market still experienced a relatively brisk pace in November. Our inventory is not having a chance to build as it is being absorbed as quickly as it comes on the market. That’s why there are so many sales every month even though the supply stock is low,” explains Dwight Delahunt, President of the Ottawa Real Estate Board.

November’s average sale price for a condominium-class property was $313,734, an increase of 9.8 per cent from last year while the average sale price of a residential-class property was $501,201, an increase of 16.9 per cent from a year ago. Year to date figures show an 8.9 per cent and 9.1 per cent increase in average sale prices for residential and condominiums, respectively.*

“Prices have increased, and therefore there is shortage of units available in the lower end price range of both condos and residential properties,” reports Delahunt. “That being said, the Ottawa market still remains strong and sustainable with reasonable increases in year to date average prices of 9% in both the residential and condominium property classes.”

The most active price range in the condominium market was $225,000- $349,999, accounting for 57.5 per cent of the units sold while $350,000 to $499,999 represented the most prevalent price point in the residential market, accounting for 38.8 per cent of November’s transactions. Residential properties in the $500,000 to $749,999 range increased to 32 per cent of all residential resales.

“As for the higher end of the market, we are seeing substantial increases in the number of properties sold in those price ranges as well. In the $750K-$1M range, 65 units changed hands last month compared to 24 sales last year at this time,” reveals Delahunt. “Further, the homes in the $1M+ plus range have increased to 29 sales last month from 15 sold in November 2018.”

“Year to date totals show the larger picture with a 41% increase in the $750K-$1M range from 610 to 861 unit sales, and a 30% increase in the $1M+ range from 266 to 345 transactions compared to this time last year,” he adds.

In addition to residential sales, OREB Members assisted clients with renting 2,559 properties since the beginning of the year.

* The Board cautions that the average sale price can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The calculation of the average sale price is based on the total dollar volume of all properties sold. Price and conditions will vary from neighbourhood to neighbourhood.