If you’re thinking of buying or selling a home in Ottawa, you may be unsure how to move forward. And with good reason. “Crazy” is a word often used to describe the recent local real estate scene. In an unbelievably strong seller’s market inspired by the pandemic, average home selling prices jumped by thousands of dollars from one month to the next. But now, signs are pointing to a more balanced market ahead.
Let’s hear Paul Rushforth’s up-to-date advice on how to identify seller’s markets, buyer’s markets, or balanced markets — and the role of a great realtor in guiding you through each one.
Signs Of A Seller’s Market
A seller’s market is where supply lags behind demand so that inventory on the market has an absorption rate from 0-4 months. That means, if no other house hit the market, it would take between zero and four months to sell all the listings.
We were in a really strong seller’s market for the last year and a half, ever since the pandemic broke out. At one point this year, we had only a 1-week supply!
Why You Need A Real Estate Agent In A Seller’s Market
In a seller’s market, many people ask, “Why do you need an agent? Everything’s selling!” True, in the seller’s market we’ve just gone through, I didn’t care whether your house was big or small, city or country… it would move. But there’s a big difference between selling for $10,000 over asking or $100,000 over asking.
Even in a seller’s market, you need a solid real estate team that can market and advertise your property expertly. A good agent knows how to handle 10, 12, 15 bids on your property and negotiate to get you top dollar, rather than just accepting the first offer.
Signs Of A Buyer’s Market
A buyer’s market has an absorption rate of six months and beyond. If no other listings hit the market, it would take 6+ months for all the inventory to sell. So you won’t see as many multiple offers or bully offers, plus every offer comes in with conditions — telltale signs we’re in a buyer’s market.
Why You Need A Real Estate Agent In A Buyer’s Market
Working with a real estate agent in a buyer’s market is extremely important when you’re listing your property because homes will be sitting on the market for quite a bit longer. Therefore, you need to list with an agent who has well-thought-out marketing and advertising plans. They have the knowledge and contacts that will allow your home to be widely exposed and get as many buyers as possible through the door. Plus, you need a team or an agent that will price your home competitively to make it stand out.
Also, it’s essential to make sure your home is up to snuff. For example, if your paint is peeling, you’ve got to repaint it. If your light fixtures are broken, you’ve got to replace them. The most impressive updated home will be the one that sells first. A fixer-upper is dead in a buyer’s market. So you need an agent who will come in and tell you what needs to be done to get your home sold.
What Does A Balanced Market Mean?
A balanced market is a normal market, where the average sale price might go up anywhere from one to two or three percent annually. So homes sit a little longer on the market. That’s what we saw in Ottawa for years and years — before COVID.
A balanced market is probably the best to navigate for home buyers, sellers, and real estate agents. Unlike a seller’s market — where you’re selling at a premium but also buying at a premium — in a balanced market, there’s a chance you’ll get a good deal on a buy, and there’s a chance you’re going to hit a home run on your sell. So it’s a much more enjoyable market for everybody involved.
As a home seller, you still need an agent who’s going to strategize to get you top dollar for your property. But as a buyer, you have more choice. Instead of having to make a decision on a house overnight, you can look at something and say, “Let’s look at five or seven more and then discuss them with our realtor.” You have time to do that.
Where’s The Ottawa Real Estate Market In The Second Half of 2021?
As of July 2021, we are in a changing market. We’re seeing more inventory coming onto the market; we’re seeing things taking longer to sell. And we see fewer multiple offers. If there’s a multiple offer situation, instead of 15 or 20 potential offers, now we see two or three.
There are still pockets that are hot. Yesterday one of my agents sold a home for $200,000 over asking. Another real estate agent of mine had to reduce a property in the same breath because it sat on the market too long. Forecasting the Ottawa real estate market can be difficult… which I’ve been saying forever!
A balanced market is still a long way off, though. We’re in a strange time because we’ve been locked down so long. People haven’t been spending a lot on things. As a result, they’ve been putting their money into the housing market. Now, as we open up going into summer, they may start travelling again. Lumber is coming down, so possibly Ottawa residents will be buying and renovating more. I think we’re going to see a healthier market coming up in the summer and fall.
Savvy Agents To Guide You Smoothly Through The Ottawa Real Estate Market
Buying or selling property in Ottawa can be a roller-coaster ride. So choose the Paul Rushforth team — we’ve got the professional knowledge and skills to make your real estate journey a smooth success.
Call us at 613-788-2122 today!
