The Spring real estate rebound continued to be hampered through the month of April by low inventory. While the total number of sales in April was more or less consistent with the same month in 2018, the number of homes on the market continued to lag well behind last year. The number of residential homes available was down 18% year-over-year, and condos were even more scarce- down 40% from April 2018. With lower inventory comes reduced days on market (down 14% for residential properties and a whopping 36% for condos), more multiple offer situations and upward pressure on price. The average home price in Ottawa, while still well under the national average, increased 7.4% in April to more than $488,000.
What’s driving the shortage? When inventory is low and buying options are limited, the “move up” market stalls reducing the number of homes available for buyers further down the chain. In some cases, buyers have been further affected by the B-20 Stress Test. This test, which essentially requires buyers to qualify for a mortgage rate 2% higher than a lender’s pre-approved rate, can reduce purchasing power, impacting first-time home buyers and move-up buyers alike.
Finally the condo market in Ottawa, like many other urban markets in the world, is being challenged by everyone’s favourite hotel alternative- Air BnB. The City is getting involved because the proliferation of “ghost hotels” impacts taxes, property taxes and has legal implications. From a real estate perspective, it also has a significant impact on inventory availability.
Maximizing Opportunity in the Current Market
As always, buyers who (with their agents) are on the balls of their feet will have the best chance of success. Mortgage pre-approval, a clear idea of must haves and dead-breakers and a spirit of flexibility with regards to conditions all contribute to putting the most attractive offer in front of a seller. In terms of a mortgage pre-approval, explore all options. Some lenders can offer flexibility around the B20 restrictions that others cannot. A good mortgage broker can help make sure you have all the information you need. I am happy to recommend one.
For sellers, the current market will ensure you will get top dollar for your home. Competition is fierce and days on market is relatively short. While home preparations like general repairs and home maintenance are as important as ever, staging and painting may be sacrificed for speed to market. A market assessment is an important piece of any sales strategy. Please don’t hesitate to be in touch if you would like to discuss.
Spring Home Repairs and Maintenance
Because of my line of work, I have more than my fair share of home repair and maintenance experience. Clients and friends always ask me for recommendations for people to do work in and around their homes and I am happy to oblige. Anyone who knows me will tell you I am incredibly particular and because of that, I can recommend the best people. I know everyone says they have the best people… I literally have “the best” people! Whether you are looking for painting, landscaping, soundproofing, roofing, brickwork, pest and rodent removal, electrical, HVAC… ask me, and I can point you in the right direction. What’s in it for me? Nothing except the opportunity to help build local small businesses I believe in in the hopes they will do the same.
Favourite Things 🙂
A few of my favourite things this month:
- Nothing beats the bike paths in Ottawa- there are more than 230 kilometres of kept pathways in the National Capital Region! I have spent many happy hours with my dog and my family biking along both sides of the Ottawa River. As soon as the water recedes, consider venturing out. And please watch out for cyclists as you drive- especially as everyone gets used to sharing the road again.
- There has been a recent proliferation of “meal kit” delivery service and I have to say, I am a huge fan. We have tried almost all of them, and our family favourite is Good Food. Delicious, healthy and creative meals and not too much packaging, it is a weekly lifesaver for us. If you want to try it out with a free box, just let me know. We have earned a bunch of them, and I am more than happy to share!
- One of my all-time favourite Ottawa activities returns to Parliament Hill on May 15th- Yoga on the Hill. I have been doing it almost every Wednesday for two summers, and it is an amazing opportunity to practice with thousands of yogis of all levels, shapes and ages in a spectacular setting. There is nothing like it. Worth checking out.
If you have any feedback on my newsletter, have questions about other real estate topics or would like to discuss opening the door to your next real estate opportunity, please be in touch.