Forecast: Looks like an absolutely mind-boggling year ahead in the world of Ottawa real estate.
How so? To get the scoop from an expert source, we sat down with owner/broker Paul Rushforth to discuss his Ottawa real estate market predictions for 2020.
Here are the sometimes surprising, always informative insights that Paul shared.
Did 2019 Meet Your Expectations? Were There Any Big Surprises?
2019 was insane! There was a huge shift last year, which flipped every housing market we’ve ever experienced totally upside down. 2019 was a seller’s market, with substantially fewer properties offered for sale than previously. The overall listing inventory continues to be exceptionally low.
At the same time, home prices shot up approximately 11 percent year over year, rising to an average of $310,675 for condos and $550,306 for residential-class properties by the end of December 2019.
The west and south were the fastest-moving neighbourhoods, with their small single-family homes and townhomes, while large detached homes in Ottawa tended to sit on the market longer.
What Is Likely To Change In 2020?
One thing which won’t change is this: 2020 will continue to be a seller’s market, but even more so. Housing prices, bidding wars and bully offers are all expected to increase.
With the chaos of our real estate market, first-time homebuyers will be forced to sit on the sidelines, settling for rentals. As a result, the rental market will be going through the roof.
What Types Of Ottawa Properties Will Have The Biggest Impact In 2020?
Small single-family homes and townhomes will have their greatest impact in 2020. The reason? Demographically, millennials are the largest cohort of buyers, and they like to live in walkable neighbourhoods. That means close to the amenities, on the LRT route so they don’t need to own a car.
“They’re looking for small and compact. Something with little to no upkeep and convenience for their busy everyday lives,” explains Paul. “That’s why the bigger homes are harder to sell right now.”
Where Should Investors Be Focused In 2020?
As well as townhomes and condos, duplexes and triplexes are a smart investment due to the high demand for rentals.
Any area along the LRT is a prime prospect. Extension of the LRT causes property values to rise; as soon as that shovel gets into the ground, the value jumps.
A perfect example of this trend is the high-rise condo towers of up to 55 stories, which are slated to be built along the LRT line.
How could changes in mortgage interest rates affect the Ottawa market in 2020?
The federal government recently announced refinements to the mortgage stress test calculation, scheduled to take effect April 6. Residential mortgage interest rates, which are already low, are likely to drop somewhat as a result.
What’s The Best Advice For Buyers In 2020?
Get your ducks in a row so you’ll be able to act fast: make sure to obtain a HARD pre-approval for your mortgage before you start your search. If you are approved for a 500K loan, look at homes priced in the 400K range, so that you’ll be ready to compete in the inevitable bidding war.
Select the right agent. Working with an excellent agent from a well-connected office is a must, because the best homes go fast. It’s essential to get a heads-up on new listings before they even show up on the MLS.
“Buyers should go into 2020 with a sense of urgency. When an agent tells you to jump, you ask how high,” Paul warns.
What’s The Best Advice For Sellers In 2020?
For most sellers, you will be writing your own ticket. Brokers have tended to advise sellers, “fix this, fix that.” Not in 2020. Now the advice is “Just get it on the market.” Not every home improvement adds value to your home.
Sellers also should work with a topnotch agent. It’s almost riskier to try to sell your own home in seller’s markets like the one in Ottawa today; you need a professional who’s experienced at negotiation and contracts. Otherwise, how do you deal with 10, 20, or 30 offers?
Hire Agents Who Are Ready For 2020!
Seek out expert guidance when you join in the roller coaster ride which is the 2020 Ottawa real estate market. Our team of qualified realtors are there for you — whether you’ll be selling, buying, or investing.
We’re up to speed with the latest Ottawa housing market predictions and are ready to advise you on topics such as realistic prices, hidden costs of buying or selling, obtaining or discharging a mortgage, or selecting a property with the best potential return on investment.