“There are still a lot of buyers out there. But there is also a lot of buyer fatigue.”
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Ottawa’s resale housing market saw a drop in sales during June, with home sales plummeting 29 percent from a year earlier as the early-pandemic buying frenzy appears to fade.
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Members of the Ottawa Real Estate Board (OREB) sold 1,508 properties last month, down from 2,122 in June 2021. Home sales are down 31 percent, while condo sales are down 23 percent. .
The median home sold for $772,861, up six percent from a year ago, while the median condo price was $438,977, a more modest one percent increase.
The change reflects a return to a more normal seasonal resale market, caused by a glut in homes and rising interest rates that have kept buyers on the sidelines, OREB President Penny Torontow said. .
“We will go back to traditional ways,” Torontow said Wednesday. “You have to remember, your house doesn’t always sell in two days.
“It’s not a bad thing. Buyers can take their time. They don’t have to feel pressured. They don’t have to be against 10 other offers,” she said.
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“Sellers are the ones who are going to have to adjust. He may not get what his neighbor got for his house six months ago. But he’ll still get a significant raise if he bought anytime before the last two years.”
Historically, home values have risen about 2 percent a year for the past 50 years, he said. The sharp increase in prices in the last two years reflects the fact that the Ottawa market has been undervalued for years and years, she said.
“Prices had reached a point where they peaked for a while. There will be some fluctuations, but people should not panic. I think things are going to level out.
“There are still a lot of buyers out there. But there’s also a lot of buyer fatigue. They got tired of bidding and losing. Now they say: ‘Prices are going down. I’ll wait a bit.’”
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Significantly, Ottawa’s housing inventory is up 38 percent from a year ago. That means if no new homes were put up for sale, it would take about 1.9 months for all existing homes on the market to sell, according to the real estate board.
The pandemic affected the housing market in many ways, but Torontow said the idea that Toronto investors were buying houses in Ottawa was a myth.
“I really feel like that was over the top,” he said. “Even among ourselves (as real estate agents), we were saying, ‘I’m hoping to get a buyer from Toronto. They will pay more. But actually, that was a very small percentage of buyers. The same with foreign buyers. They became something of a scapegoat and were blamed for driving up prices, but domestically, foreign buyers make up less than two percent of the market.”
