If you’re contemplating buying a new home or selling in the Ottawa real estate market, you’ve no doubt heard the terms ‘low housing inventory’ and ‘low listings’ in recent weeks. Paul himself has shared expert advice on the subject with several news outlets. It’s probably made you a little nervous, which is understandable.
In this article, will explain what real estate inventory means, how it will affect a home sale, and what you need to do to prepare to buy or sell in Ottawa.
What Does Real Estate Inventory Mean?
Real estate inventory is another way of defining the number of homes available for sale. To calculate how many months of inventory we have, we take the number of homes currently for sale and divide that by the number of homes sold or pending sale within the same time period.
The final number is the number of months it would take us to sell all the homes currently listed if no new listings were added.
Why Does it Matter?
Real estate inventory matters because it is an indicator of the current market. On average, if we have 5-8 months of inventory, we’re in a balanced real estate market. Anything less than 4 months, and we’re considered to be in a seller’s market. Anything more than 9 months, and we’re in a buyer’s market.
Right now, Ottawa has a lower than usual number of home listings for this time of year. This means that we’re heading towards more of a seller’s market. Learn more about current market statistics >
How Will A Lower Real Estate Inventory Affect My Home Sale?
A seller’s market means that there are more buyers looking for a new home than there are listings. This will impact a seller in the following ways.
1. You’ll Have to Prepare for a Shorter Time on the Market
As long as your home is in good condition and priced correctly, you need to be prepared for your home to sell more quickly than usual. Homes, particularly in the most active price point of $300,000 to $499,999 aren’t sitting on the market for weeks at a time – some are going within days of listing.
2. You’ll Have to Be More Flexible with Showings
With less to choose from, more buyers are going to want view your house. This means that your house is not only going to have to be decluttered, cleaned by a professional, and staged right away, but you’re going to have to be more flexible with showings. It wouldn’t be uncommon to have multiple showings in the first few days, and you’ll have to leave for each one.
We highly recommend that you never turn down a showing unless there’s is some sort of emergency. Refusing a showing means turning away a buyer, something you never want to do in any market.
3. You’ll Have to Be Prepared for a Bidding War
Paul has estimated that about 50% of our recent sales have been sold in bidding wars. A bidding war is when multiple homeowners make offers on your property, trying to beat competing home buyers.
This can be overwhelming for homeowners: how on earth do you know what’s a good offer, and how do you choose? In markets like this one, we highly recommend that you hire an experienced realtor to help you sell your home and navigate bully offers. We can make a stressful situation much easier, and get you the best price possible.
Should I Buy Before I Sell?
When people hear seller’s market, they immediately wonder if they should buy a home before they list, because they’re worried they may not have a place to live when if their home sells first.
There are risks that come with buying before you sell, just like there are risks with selling before you buy. But before you make any decisions, there are 2 important things you need to do.
1. Get Your Current House Appraised
Often the value of your current home will impact your next home purchase, so it’s crucial to get your home appraised by a professional. Then you’ll have a good idea of how much equity you have, and be able to take that information to your mortgage broker.
2. Meet with a Mortgage Broker, and Organize Your Financing
The last thing you want to do is go out into the market with no real idea of how much house you can afford. It’s soul crushing to fall in love with a home only to find out it’s out of your price range.
That’s why we insist that our clients first meet with a mortgage broker and get their pre-approved financing in place. Not only will you have a fixed number to work with, but you’ll be able to act fast when you find the right home.
Once you complete these 2 steps, we can help create a buying and selling plan that works for you. Many people choose to do both at the same time. It sounds daunting, but we have plenty of experience and many helpful resources to share with you>
With the Right Agent, You Can Succeed in Any Market
Now is a great time to sell your home because there will be lots of interest in it. With the right agent, you can also find the perfect home to buy. You can succeed in any market if you have a team of experts behind you. When you work with us, that’s exactly what you get: a team that is focused on you and your goals.