Adjusting Expectations: The Fall 2022 Real Estate Market in Ottawa
The insane real estate market over the past two years has changed sellers’ perspectives of what selling a house is really like.
Post-covid, with the lowest interest rates we’ve seen in Canada in decades, buyers were excited to enter the market. Housing prices had been rising for years, meaning that any property became an excellent investment. But inflating prices can only inflate for so long before they pop.
To start, it is important to recognize that housing prices are not dropping in Ottawa just yet. Trends suggest that they just aren’t growing at the same rate that they once were. We had seen prices rising in the double-digit percentages year over year. Now, they are moving up in the single digits, but they are still rising!
Some of the other trends we’ve noticed in our new and changing market are longer DOM (days on market) and fewer bidding wars. Sellers are typically seeing their homes on the market for longer, and only having one, maybe two offers, unless they are exceptionally well priced.
Although this changes things for buyers and homeowners who were looking to increase their wealth through their home investments, this is a positive thing for buyers, who have been struggling to find and afford homes in such a rapidly inflating market.
We were once in a seller’s market, meaning that the inventory (amount of homes available versus those sold) was low and interest was high. With more inventory now, we are moving towards a balanced market, which is actually more fair and accessible to buyers.
Economists are predicting that housing prices may fall in the coming months as interest rates continue to rise. That being said, it is important to note that the price that they fall to will still be higher, on average, than before the pandemic.
Although these changes seem severe compared to the fast rise in prices and the steep competition we’ve seen over the past two years, we must remember that our housing market is still more expensive and competitive than it was just three years ago, even as it levels out.
In the meantime, as the market adjusts, we have seen more and more buyers sitting on the sidelines to wait and see what happens next. Sellers, on the other hand, seem to be accepting that they will not be getting the same price on their home as they may have hoped for six months ago. As the market continues to shift at a fast rate, we are seeing what could be called a ‘stalemate,’ where both sides are waiting to see what happens next. Buyers want a better price, and sellers want to see where they stand in the next few months, not wanting to accept lowball offers or settle for a price that doesn’t work for them - especially if they aren’t in a rush to sell.
To adjust your expectations for the changing market, we recommend:
Preparing more time to let your home sit on the market. If you’re thinking of selling, and have a strict timeline, be sure you adjust for the longer average Days on Market we are seeing as buyers take their time.
Adjust your pricing expectations. Although it may feel like you’re getting less than you expected 6 months ago, you are most likely still getting a better price than you would have two years ago. Prices are still up!
If you are buying, use this market to your advantage. Tour lots of homes to really find the right one for you, and know you can offer a price much closer to what a home is listed at than what you may have done in the past.
