The Ottawa Real Estate Market is Shifting
Welcome to Living in Ottawa. We’ve been talking about the super-strong seller’s market in Ottawa ever since the first upswing of the pandemic. The Ottawa real estate market has been a wild ride ever since, with double-digit growth in both properties sold and price increases.
As an Ottawa real estate agent, it’s hard to wish for a slower market, but these are not typical times. It’s been getting harder and harder for buyers to find homes. Ottawa properties are selling well above market value.
We want our homebuyers to find a great home that is both a solid investment and fits their budget. And our sellers need to be able to find their next home. So I’m happy to tell you that we’re starting to see a small shift in market conditions.
The pandemic real estate market has been filled with rapid change and uncertainty. Waiting for official reports hasn’t always been the best option for buyers. Because we work with both buyers and sellers, we have the advantage of seeing shifts in terms of days and weeks rather than months and quarters.
In the past few weeks, we’ve been seeing some signs that the real estate market might be on its way down to Earth. It’s not going to become a buyer’s market, but maybe we can look forward to a market where prices and availability are a little more reflective of the reality of the properties being sold.
The Spring Market
Our first glimmer of hope is that the spring market boost may have happened in February. That doesn’t mean sales won’t be strong throughout the upcoming months, it’s just a small shift that might help open things up a little.
January and February are usually fairly tame months, with lower sales and fewer properties on the market. This year brought more sales and larger than usual price increases, especially in February.
March traditionally begins the busy spring market, with prices staying high until around June. But it may be that we’ve already seen our spring peak.
COVID seems to have changed the market cycles. Is it a permanent change? There’s no way to know. But in 2022, as in 2021, spring arrived early for the housing market. People moving to Ottawa may reap the benefits of that shift during the next few months as the early summer lull starts in the spring.
So what else is telling us that the market may be shifting?
Sellers are seeing fewer showings on their properties than they were at the peak of the pandemic market. It hasn’t been unusual to see houses have 100 or more showings. In recent weeks those showing are starting to fall.
Maybe it’s because potential buyers are just worn out. The lightning-fast pace of the market is exhausting and some folks are certainly taking a break. But is that all it is?
Honestly, it doesn’t matter why there are fewer showings, the result is that some sellers are lowering their asking price or offer minimum. That’s good for buyers and good for the market.
It doesn’t happen often that industry experts wish we could pump the brakes. But this is one of those times. A market this lopsided certainly makes things difficult for homebuyers. It also makes people reluctant to sell unless they’re ready to exit the home market completely.
While offer dates are here to stay, for now, sellers are seeing fewer offers to choose from. It isn’t that the market is balancing or shifting to the advantage of the buyer. But having half a dozen offers instead of 20 on the offer date creates less pressure for both buyers and sellers.
It simply allows a little breathing room for everyone to make good, informed decisions.
We’re also seeing sellers starting to take occasional bully offers. If you haven’t heard that term before, it’s another name for a pre-emptive offer. This is when a buyer puts in an offer before the offer date set by the sellers. These offers are usually well above the asking price and allow the buyer to avoid competition.
There’s been little incentive for sellers to accept most bully offers when they have dozens of showings arranged. They’ve been likely to see a better offer on the competitive offer day than even the most aggressive bully offer.
But with showings decreasing, sellers are becoming less willing to gamble and more willing to take a good pre-emptive offer. Sellers who are buying a new home don’t need the stress of uncertainty.
Another interesting sign of a changing market is the increasingly sparse availability of professional property photographers. This is something you really need to be on the ground and in the fray to notice.
But we have noticed. If you can’t find someone to take your seller’s photos that means they’re booked elsewhere. When everyone seems to be booked that can mean that a lot of homeowners are preparing to sell.
We call all of these things micro-trends, little things that make us perk up and pay attention. Buyers and sellers both benefit from working with an Ottawa realtor who knows both the market and the other professionals working in the area.
Will the arrival of spring still bring changes to the market even though the spring market appears to have happened early? It might. With warmer weather comes easier construction.
As new home projects are completed the increase in available units relieves some of the pressure on current inventory.
COVID has changed so many aspects of our lives that it’s hard to imagine how they all interact. We see hopeful small signs of real estate market moderation in Ottawa and we’re happy to pass that good news on to you. As always, we’re in the trenches every day. That helps us bring you information that’s useful now, rather than in hindsight. Keep tuning in to find out the latest on the Ottawa housing market and contact us to help you buy or sell your Ottawa area home.