Ottawa Real Estate: Home Resale Shifting Toward Balance, But Not Yet There

“It’s pretty clear that Ottawa’s resale market is shifting from the blazing fast pace of 2021.”

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Average home sales prices in Ottawa fell for the third straight month in May, but were still eight percent higher than a year earlier, according to data released Friday by the Ottawa Real Estate Board.

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It was a similar pattern for apartment sales, although year-over-year price increases were slightly higher at 11.3 percent.

Across the city, nearly 1,400 homes changed hands in May for an average price of $802,400, down from the record price of $853,600 in March. Also last month, 462 apartments sold for an average of $473,000 — still close to the March peak of $479,400.

“It’s pretty clear that Ottawa’s resale market is shifting from the blazing pace of 2021,” board chairman Penny Torontow said, citing higher interest rates and inflation as factors driving prices down.

There were multiple signs in May of a market trying to return to normal, although it was not there yet. The number of homes stood at 1,645 at the end of May, an 18 percent year-on-year increase and the highest level since November 2019.

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There were 470 apartments on the list, about the same number as a year earlier. The apartment market has been more buoyant recently, in part because first-time homebuyers couldn’t afford homes.

Torontow also noted an increase in the number of days it took to sell homes from when they were first listed. The average for homes sold in May was 14 days, compared to 11 in May 2021.

Still, she added, the resale market isn’t considered balanced until inventories surpass sales by at least a month.

It had been three years since Ottawa’s resale prices started rising in a way that caused the imbalance. In May 2019, the average resale of homes was just $494,000, and prices were up less than seven percent year over year. Since then, average earnings have been close to $310,000, representing a 63 percent increase.

Apartments sold for $281,000 three years ago in May. Last month, the price was up nearly $192,000 for an average increase of 68 percent.

That’s why the world has changed, both for a generation of homeowners who happened to own real estate in 2019 — and in a negative way for tens of thousands of potential owners who either paid more than expected to enter the market or lagged behind.

The May board’s data offers some hope that they may not be left behind forever.

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