Happy New Year – I wish you all the best in 2015 and hope you accomplish Great things while making a positive difference!
By now, the holiday’s season is just a memory and for some and so are those New Year’s resolutions. This is not necessarily a bad thing as sometimes our routines are healthy for us all. For me, one of my routines, for this time of year, involves contacting as many clients as I can to say hello and ask if they have any real estate plans for 2015. The nice thing about doing this is it gives me a chance to find out what’s happening in their life.
Many of the people I speak witheventually ask me, ‘how the market is and what’s going to happen this year in real estate?’ It’s a great question and one that I spend a lot of time researching. In case you too are wondering the same thing, I thought I would share my views.
The 2014 Ottawa Real Estate Market in Review
2014 was an interesting year for Ottawa real estate. The first quarter of the year was a little slower than usual with more properties on the market than in previous years. There were some pessimistic predictions from Economists, cutbacks on the number of personnel transfers and more changes in mortgage lending rules. All factors that contributed to slower start in sales, but once the snow melted and the weather improved (spring market), it was business as usual.
By the end of the second quarter there were signs that inventory was taking longer to sell, especially with condominiums and properties outside the greenbelt. Properties were still selling, some just took longer and some with speculative prices needed adjusting otherwise they did not sell. In the fall, the market was healthy with a lot of choices for buyers to look at and homes selling at a reasonable pace. This momentum carried into December and remained until the end of the year.
“The total number of homes sold through the Board’s MLS® system in 2014 was 13,928, compared with 13,871 in 2013, an increase of 0.4 per cent. Residential unit sales for the year were slightly higher with a 2.4 per cent increase over 2013, while condo sales declined by 7.2 per cent compared to last year. The average residential home price, including condominiums, sold in 2014 was $361,712, an increase of 1.2 per cent over 2013.”
The market did change in 2014 and yes, there was definitely a slowdown in the absorption rate, but sales volume remained relatively the same and slightly better than the previous year which is a positive. There was a minimum increase in prices (year over year) for residential properties and a decline in the sale of condominiums that created a change in both Buyer and Seller behaviour. The effect of which had Sellers more receptive to negotiate on pricing while buyers were taking their time with buying decisions and even waiting for other properties to come on the market. Buyers were still buying, but it was evident that many were proceeding more cautiously and not prepared to pay the ‘future value prices’ that some sellers were initially expecting.
What’s ahead in 2015?
It’s 2015 and what does the future of the Ottawa real estate market look like?
2015 will start the year off ‘strong’ and there are already some early signs of this. Consumer confidence has been very positive since the beginning of October last year with a lot of positive predictions from Economists; this is evident in the start of the 2015 market. I expect this momentum to continue into the spring market and last until the beginning of the summer months.
The number of properties for sale (supply) this year has already increased over the start of the previous year and this should create a downward pressure on the absorption rate so expect some properties to stay on the market longer. Will this be the end of some homes selling for over asking? Absolutely not, in certain circumstances, the consumer will continue to pay more for what they really want, especially if someone else wants the same property.
What are your thoughts on the market? Feel free to send me an email at firstname.lastname@example.org . I would love to hear from you!
On another topic, have you ever wondered how much income you need to earn to buy in some other Canadian cities? I came across this and found it quite interesting:
What can your wages buy you?
A new report shows how much you need to earn to live in Canada’s major cities and as you’d expect there’s some disparity. For example, to buy an average home in Vancouver you would need an income three times as much as you would to buy a similar home in Halifax. The report from work website Workopolis shows the maximum a bank may be willing to lend based on a mortgage rate of 2.99 per cent. With that in mind you need an income of $56,929 to buy an average home in Halifax; $58,235 in Winnipeg; $68,884 in Montreal; $72,028 in Regina; $72,617 in Edmonton; $74,546 in Saskatoon; $74,820 in Ottawa; $88,578 in Calgary; $113,009 in Toronto; and $147,023 in Vancouver.
As always, if you hear of anyone thinking of buying or selling real estate, I would sincerely appreciate your passing my name along as many of you currently do.
Peter Sardelis, Broker Century 21 Capital Realty Inc.