The Ottawa Real Estate Market 2013 Thus Far
Sales to date for both residential and condominium properties are down a little over 10% compared to the same time period in 2012. All in all, I would have to say it’s not that bad considering some of the winter storms we weathered this year. Weather does not directly affect the real estate market, but it does have an impact on how long it takes for sales to happen. A good example of this would be the Ice Storm in January 1998, do you remember it? The city ground to a halt and in some communities it lasted for weeks before everything slowly went back to normal. When it did get back to normal, real estate sales picked up and the year finished at its regular pace, everything was just delayed because of the weather.
Is the weather the only reason our market is down 10+% in the first 8 weeks of the year? The short answer is no. As I mentioned many times before, government cut backs, new mortgage rules and negative press have contributed. But for the most part, consumer confidence in owning real estate is still very high and with the low cost of borrowing people are still confidently investing in home ownership.
The Ottawa real estate market is stable and is amongst one of the best markets in the country. We in the industry foresee of an increase in sales activity in the upcoming months that may reduce that 10% drop to single digits. There are buyers in the marketplace who are actively looking and not just bargain hunting. They are looking at first-time purchasing, upgrading, downsizing and investing which pretty much covers all the levels in our market.
You may have noticed some homes in your neighbourhood staying on the market longer and sometimes not selling at all. In a balanced market, like we are in now, this does happen because not every home is sellable at its current value or in its current condition or at this time. Some homes need to show better, or need more time on the market and/or require price adjustments to get sold. Unfortunately, some sellers are not as receptive to what’s required because of ‘what the house down the street sold for’ which basically means they should get the same no matter what. Most realtors will fight to maintain this value for their sellers, after all, that’s probably the value the realtor told the seller they should get and probably contributed to that realtor getting the listing. What I learned a long time ago is a Realtor cannot control value, no matter how hard they try, market demand and timing control value.
If you’re planning on selling, now more than ever, a consultation on pricing, home preparation, timing and a selling strategy are more important than ever before. If you are buying, do your homework because prices will not increase as quickly as they have in the past 13 years. This does not mean you should hold off buying because the cost of borrowing is still very low and makes ownership affordable. You should however pay attention to the long term benefits of owning real estate and what it will mean to you, your family and your lifestyle.
As always, I would love to hear your thoughts.