Planning to purchase a house or condo unit in Ottawa in coming months? Congratulations! Here are a few things to know about what to expect, based on the sales numbers for April from the Ottawa Real Estate Board:
Prices are Lower than a Year Ago, but Starting to Rise
After the Bank of Canada began hiking its key lending rate in March of 2022, borrowing costs for buyers increased, and average sale prices in Ottawa and other cities started to decline as a result of lower demand.
In April, the average sale price for a residential-class property in Ottawa ($747,123) was down 10% from the average in April of 2022.
The average sale price of a condo unit in Ottawa in April ($435,875) was down 8% from April of 2022.
But we have also seen fewer new listings than usual in recent months, so inventory has declined, and average sale prices have started heading back up. Since December of 2022, when Ottawa’s resale market reached a low, average prices have climbed by 13.9%.
More Inventory than a Year Ago, but Stock is Declining
In the pandemic period, there was much less inventory than usual on the market. Many buyers felt pressured to make instant decisions and to waive traditional conditions on their offers.
Back in April of 2022, there was less than a month’s worth of inventory available for sale. (That’s the length of time it would take to sell all properties if no new listings were added).
In April of 2023, that was up to 1.9 month’s worth for both condos and residential-class properties.
That’s an improvement, but still below the two to four months that would be needed for a balanced market. With fewer new listings than usual in March and April, stock is declining, and the market is getting tighter.
As Ken Dekker, President of the Ottawa Real Estate Board noted in a statement, “we’re back into sellers’ market territory.”
Properties are Selling Faster and Multiple Offers are Back
In April in Ottawa, properties in the most popular neighbourhoods were experiencing multiple offers, and properties have been selling faster.
In April, residential-class properties sold in an average of 27 days. That was down from 34 days in March and 37 days in February.
Condo units in April sold in an average of 33 days. That was down from 39 days in March and 43 days in February.
How Buyers Can Prepare
With the market getting tighter, it’s especially important to get a mortgage pre-approval from your financial institution or mortgage broker.
With a pre-approval, you are approved in advance for a mortgage and a rate for up to 120 days, on the condition your financial situation does not change substantially during your search. You are promised that rate, even if rates go up during your search. If rates go down during the search, you will get the lower rate. That gives you a solid four months to look.
With a pre-approval, you know how much you can spend and which properties you can consider. A pre-approval also shows a seller that you are a serious buyer and are qualified when you make an offer.
You should think carefullyabout which features are musts for you and which would be nice but are not essential. This makes it easier to act quickly when you see a property you like, even if it doesn’t tick every single box.
Have an Experienced Realtor on Your Side
Purchasing a property is the most expensive single purchase most of us will ever make, so it’s important to have an experienced Realtor at your side, representing your interests in the transaction and negotiating on your behalf, just as the sellers have a Realtor on their side.
If you’re a first-time buyer, you may not be aware that a Realtor’s services come at no cost to you, as our fees are covered by the seller’s Realtor.
With more than 30 years of experience helping Ottawa buyers in all market conditions, I’ve developed successful strategies for buyers in even the most challenging markets.
You can read more about me and my services on my site, www.nancybenson.com, where you can also read testimonials from clients. I’d love to chat and tell you more about the current market and the expertise I offer.
Feel free to give me a call, at 613-747-4747.