Market Slowdown: Analysis with Charlene Weber

Nov 8

If you've been keeping a close eye on the real estate market, you might have noticed some interesting trends recently. We spoke with Charlene Weber about what the current trends mean for buyers.

In October 2023, total sales clocked in at 816, which, compared to last October's figures, showed a 2.7% decline. Additionally, the year-to-date total sales volume sits at 10,696, reflecting a 12.4% drop from the same period in 2022. But before you start worrying about a housing market crash, it's essential to understand the context and what this data means for both buyers and sellers.

A Seasonal Slowdown

As we reached the end of October, we saw the highest number of active listings on the market in over five years. For sellers, this might sound alarm bells, but it's not entirely unexpected. The real estate market typically experiences a slowdown as winter approaches. The holiday season, colder weather, and shorter days often mean that potential buyers become more selective, focusing on their personal lives rather than house-hunting.

It's the classic tale of supply and demand. A surge in available properties and fewer buyers actively seeking homes can lead to a temporary dip in sales. In this respect, the seasonal shift we're witnessing is par for the course.

Situational Realities: The Cost of Living and Interest Rates

Beyond the seasons, two situational factors are currently influencing buyer behaviour. The first is the high cost of living, which affects every aspect of homeownership. From property taxes to utility bills, the financial burden of homeownership has been steadily increasing. This financial stress is prompting buyers to adopt a more cautious approach.

The second factor, and one that often looms large, is interest rates. With rates still high, many prospective buyers are opting to wait, expecting that a more favourable lending climate may be on the horizon. This anticipation contributes to the recent slowdown.

Dissecting the Statistics: A Closer Look

To gain a more comprehensive understanding of the current real estate landscape, let's break down the statistics further.

Residential Properties: The average year-to-date sales price for residential properties is $672,070, a 5.9% decrease from the previous year. The month's inventory stands at 2.2, which indicates the number of months it would take to sell all current listings on the market. This figure is significant because it helps us gauge the balance between supply and demand.
Single-Family Homes: Single-family homes have seen an average year-to-date sales price of $825,855, reflecting a 6% decrease from the previous year. The month's inventory in this category is at 2.6, a noticeable increase compared to the 1.5 reported year-to-date.
Townhome/Row Units: The townhome and row-unit sector has experienced a drop in their average year-to-date sales price, which now stands at $547,968, down 8% compared to the previous year. The month's inventory is at 1.6 months, slightly higher than the 1.2 reported year-to-date.
Condo Apartments: For condo apartments, the year-to-date average sales price is $440,186, which represents a 2.8% decrease from the previous year. The month's inventory for this category stands at 2.5 months, compared to 1.6 year-to-date.

A Buyer's Opportunity: The Silver Lining

In the midst of these statistics and the market slowdown, Ottawa Real Estate Board (OREB) President Ken Dekker emphasizes, "Don't let the lull fool you: now is a prime time for buyers to be looking for opportunities before the current carries us from a balanced market into seller's territory."

This is an exciting opportunity for buyers, particularly first-time homebuyers, to explore the market with a discerning eye. As prices adjust and inventory grows, there's room for negotiation and finding that dream home at a more reasonable price. The market is currently in a delicate balance, offering a favourable environment for buyers before it shifts in favour of sellers.

While the recent statistics might indicate a slowdown in the real estate market, it's important to understand the factors at play. Seasonal and situational influences are at work, but they also create opportunities for buyers. So, if you're in the market for a new home, this could be your ideal time to make a move and secure a property before market dynamics change. The market is in flux, and savvy buyers have a window of opportunity to find their dream home at an attractive price.