The Ottawa Real Estate Board sees hope in the February 2023 resale market despite a sharp decline in transactions compared to a year ago and the eleventh month in a row of an underperforming marketplace.
Members of the board sold 855 properties in February through its Multiple Listing Service (MLS), compared with 1,411 in February 2022, a decrease of 39 per cent. Despite being down significantly from a year ago, February’s numbers are inching closer to the five-year average of 1,157 total sales for the month.
February’s sales included 633 non-condominium properties, down 42 per cent from a year ago, and 222 condos, a decrease of almost one-third from the same month last year.
“We’re going to see declines in transactions and prices when we compare current figures to last February — the height of the pandemic resale market activity,” said board president Ken Dekker in a statement. “On the other hand, with the Bank of Canada holding interest rates steady, prospective buyers have more budget certainty to work with as we head into the spring market.”
Prices down but also up
The average non-condo property in Ottawa sold for $708,968 last month, down 15 per cent from last year but up five per cent from last month. Condos averaged $410,927, a 12 per cent slide from a year ago and slightly less than last month.
“The average price increase for (non-condo properties) over January could be an indicator that buyers have normalized to the current interest rates. And perhaps it’s a glimmer of more activity to come in the months ahead,” said Dekker.
Royal LePage’s market forecast for 2023 sees a price increase of one per cent for non-condo properties and two per cent for condos over 2022. Those numbers, radically different from the double-digit increases the Ottawa resale market experienced over the past few years, will be comforting to buyers, if less so to sellers.
At the same time, that’s no guarantee we are getting closer to a state of normalcy in Ottawa’s resale market, normalcy having been hinted at as long ago as June 2021.
And with industry analyst PMA Brethour Realty anticipating a possible surge in the resale market later this year, prices could again start to mount as buyers scramble for properties.
Inventory holding for now
The board’s report on the February 2023 resale market showed an inventory of 2.8 and 2.5 months for non-condo and condo properties respectively. However, listings, which increased throughout 2022 after a long-running drought, were down in February to 1,366, lower than the five-year average of 1,632.
Days on market — an indication of buyer interest — were also down last month compared to January: 43 to 37 days for non-condo properties and 47 to 43 days for condos.
“A decrease in the days on market, paired with fewer new listings entering the market, is good news for sellers,” says Dekker. “However, if that trend continues to impact our supply stock and we don’t get more inventory, our otherwise balanced market could swing back into seller’s territory — but it’s too early to predict.”