With fall now upon us, days are getting shorter and the weather is a little cooler. Kids are back in school and summer vacations are now over. For most people, its back to full-time work hours and getting their homes prepared for winter.
In real estate, we are actively engaged in the fall selling season which is known as the second best time of year for real estate sales. Sales in September are occurring steadily and all market indicators are showing they should continue until the end of the year.
There has been a lot of negative press lately about the Canadian real estate market and its projected future so I thought I would share my opinion about Ottawa’s market with you. In the media, some economists have predicted a slowdown and correction in pricing by as much as 20% to 25%. Wow! That’s a lot of money! These kinds of predictions create a lot of media attention and in some cases, it can happen, but not in Ottawa. If it does happen, the most likely marketplaces are Toronto and/or Vancouver where there have been some crazy increases in value over the past decade.
Has the market changed from a seller’s market to a buyer's market? Not in Ottawa. It has however changed to a more balanced market and not because real estate values are too high. Mortgage borrowing rates for home ownership is still the lowest it’s been in years which still makes buying a home an affordable and good investment for Canadians.
So why has the market changed? It’s never just one factor, markets continually change for many reasons; demographic cycles; employment (+/-); governmental fiscal changes , economic stability; etc. My belief is that one contributing factor could be the government layoffs and future layoffs that have put many in limbo. Government employees and people or companies servicing the government are waiting to see if the future layoffs will affect them. The last time the government did layoffs was in the mid 90’s, the impact was not immediate, but rather a trickle effect that was fully noticed almost a year later. Companies servicing the government finished their existing commitments or contracts that year and the following year began experiencing signs of change. Think about it, if the government reduces its spending and cuts back on employment, it’s going to have some kind of cooling effect.
One thing for sure, no two cycles are ever the same and everyone can learn from previous cycles. This time around the government cutbacks were better calculated and rolled out with the intentions of not repeating the market swing experienced in the mid 90’s. Expecting a repeat of the mid 90’s is not likely to happen.
Real estate is trading well in Ottawa and will continue to do so. Summer sales were less than in 2011 (a record year), but trading was still within the numbers of the 5 year average. After all, we are living in one of the best cities in Canada and in one of the best (if not the best) countries in the world. In an article -7 Best Housing Markets to Live in - Canada was rated #2 behind Hong Kong.
If you are thinking of selling anytime soon it might be a right time to start talking with me, so you can start doing things to your home to better improve the chances of a sale in the future.
What do you think? I’d love to hear from you.