January 2020 Inventory Shortage

If you thought things couldn’t get any harder for buyers, January has made buying more difficult. Due to a decrease in houses on the market, 2020 seems to be heading towards a loss in momentum.

Here are the January 2020 numbers:

  • Total number of units sold: 780 – down 4.5% from 817 in January 2019.
  • Five-year average unit sales for January: 713.

Here are the specifics for each property class:

  • Number of residential-class properties sold: 558 – down 8.4% from 511 in January 2019.
  • Average sale price of a residential-class property: $516,229 – up 19.3% from $416,596 in January 2019.
  • Number of condominium-class properties sold: 222 – up 6.7% from 207 in January 2019.
  • Average sale price of a condominium-class property: $338,077 – up 19.1% from $271,814 in January 2019.

Slow January For Buyers

Unfortunately, buyers are now forced to settle for anything due to the loss in momentum around homes on the market. Although condominium-class properties have seen an increase since last year, the buyer’s desperation towards finding a home outway the impact of condos.

“2020 is off to a slower start as the shortage of inventory is now impacting market momentum,” states Ottawa Real Estate Board’s President Deborah Burgoyne. “Although we have higher sales than the five-year average, due to increased condo sales, the persistent supply challenges seem to have finally caught up with us. Furthermore, the number of new listings that came on the market in January (1,082) is well below the average (1,651).”

When you head into a new year, you expect there to be some kind of change. But due to type of real estate market we’ve had to endure since 2019, nothing is subject to change any time soon. Supply isn’t keeping up with demand, but why is that?

“We don’t expect this trajectory to change anytime in the foreseeable future,” Burgoyne acknowledges. “The supply chain needs to be buffered at all points along the continuum from first-time and move-up buyers, to downsizing boomers as well as renters. They are all interconnected links in the housing chain.”

“The fact is Ottawa’s market has always been steadily increasing at a reasonable pace and is sustainable. If buyers are waiting for prices to decline, based on historical trends, it’s not likely,” Burgoyne cautions. “Although supply may pick up eventually—if you need to get into the market, don’t wait. It’s a challenging market for everyone. Hire a trusted professional to ensure you are protected and well informed in your home buying or selling transaction.”