Uncertainty over rising interest rates continued to cool Ottawa’s resale residential real estate market in August, with total transactions for the month down more than 25% from August of last year, the Ottawa Real Estate Board has reported.
Average sale prices, however, were still up from where they were a year ago, with residential-class properties up 5% and condo-class properties up 4%.
Members of the Ottawa Board sold 1,137 residential properties in August 2022 through the Multiple Listing Service (MLS) System. That was down 27% from the 1,565 sold in August of 2021. The total was also below the five-year average for sales in August, which is 1,603.
“August is a traditionally slower month in Ottawa’s resale market ebb and flow cycle due to summer vacations. Compounding the slowdown in market activity, buyers are uncertain about their purchasing power given impending additional interest rate hikes,” Ottawa Real Estate Board President Penny Torontow said in a statement.
“The lightning speed at which homes were selling at the start of 2022 is a thing of the past,” she said. As evidence of that, the average number of days that properties were on the market was approaching 30 days, which is typical of a more balanced market.
During the peak of the seller’s market over the past two years, multiple offers were common, and properties sometimes sold in a day or two. Many buyers felt pressured to decide quickly, bid over their comfort zone and drop conditions that are usually standard, such as an inspection of the property.
In other good news for buyers, she said “we have also observed a return to standard financing and inspection conditions and fewer multiple-offer scenarios.”
Average Sale Prices
Condominium-Class Properties: The average sale price in August for a condo unit was $421,966. That’s up 4% from the average in August of 2021.
Residential-Class Properties: The average sale price for a residential-class property in August was $707,712, up 5% from August of last year.
In good news for buyers, those averages are lower than where they were at the peak of the seller’s market in the early months of 2022. In March, average sale prices reached a peak of $853,615 for residential-class properties and $479,405 for condo-class properties. Average sale prices have declined each month since then.
“Prices are still rising slightly in some areas, albeit lower single-digit percentage increases, bringing back the moderate price-growth stability that is characteristic of the Ottawa resale market. What happened in 2020 and 2021 was unusual,” Penny Torontow said.
In other positive news for buyers, there were an additional 2,093 properties listed on the market in August. That raised inventory to nearly three months’ worth (the length of time it would take to sell all units if no others were added) for residential-class properties and 2.2 months for condominium properties.
“We are moving towards a balanced market state, where buyers have choices and sellers need to ensure they are pricing their properties accurately,” Penny Torontow said.
“The informed market knowledge and insight of a licensed Realtor is critical to both buyers and sellers navigating market shifts,” she added.
“Sellers will want to closely explore with their realtor the best time and price to list their home to optimize a property’s days on market. Buyers can use the extra time to work with their realtor on due diligence and finding a dream home that meets their needs within their financial parameters.”
The Board cautions that while average sale prices for a specific month can be useful in establishing trends over time, they should not be used as an indicator that specific properties have increased or decreased in value. As with every city, prices and price changes will vary by neighbourhood.
If you’re considering buying or selling in Ottawa, I’d love to chat with you about and tell you more about the current market and conditions in your area of the city.
With more than 30 years of experience assisting Ottawa clients and negotiating on their behalf in all kinds of markets, I know the city and its neighbourhoods well. You can read more about me and my team at www.nancybenson.com