September‘23 Market Update
Ottawa Real Estate Market Update: Sleepy September
Sales Volume and General Thoughts
In September 2023, a total of 946 homes sold the MLS® which is comparable to Septmeber ‘22. While sales were consistent with the previous year, they still fell short of typical September levels, with a 29.6% drop from the five-year average and a 23.6% decrease from the ten-year average for this month. On a year-to-date basis, home sales reached 9,889 units in the first nine months of the year. This marked a significant 13% decline from the same period in 2022.
Ken Dekker notes that while sales activity mirrored the previous year, it remained well below what’s expected for September. A surge in new listings over the past several months has gradually increased overall inventories but supply levels still remain low when compared to historical standards. The Ottawa market currently enjoys a balanced status - a notable change from the last few years being consitently a seller’s market. Sale prices are down from the previous year and roughly equate the same levels as 2021.
As this article is normally my interpretation of OREB’s monthly stats updates I would normally dive into generalized average sale prices. This month OREB decided to redirect their vernacular and discuss prices in reference to the HPI (The Home Price Index). While this tool is very usefull, in the context of the general discussion of Ottawa as a whole from a month to month update perspective, I don’t find it appropriate. Instead I will reference The general averages so that readers can compare with previous month’s and draw upon thier own conclusion. The average YTD average price was $672,837, reflecting a 6.5% decrease compared to the first nine months of 2022.
Back to the HPI - It really is a useful too. It’s something I employ in my day to day work when working with clients in order to give one interpretation of specific, local, and focused statistics. As a whole (just like general statistics) it’s hard to garner any real information except for a general pulse within an area. The intention of OREB’s market updates and of course these articles is to give you something to think about and compare from month to month. Unfortunately as I’ve stated before this information is often incomplete or framed in a hopeful way. Digging down into specifics when discussing a particular property is much more telling when trying to understand the value of a specific property. These generalizaed averages do help show general movements within a larger market and It is my hope to dissect these movements and help you by interpetting them. On to inventory.
Inventory Count
New listings showed a healthy increase of 9.8% from September 2022, with 2,259 new residential listings in September 2023. These new listings were 4.8% above the five-year average and 7% above the ten-year average for this month. As of the end of September, 2,997 residential listings were active on the market. This marked a substantial gain of 14% from September 2022, and it's noteworthy that active listings haven't been this high in September for the past five years.
Active listings are currently 33.9% above the five-year average and 18.5% below the ten-year average for this month. The months of inventory stood at 3.2 at the end of September 2023, up from 2.8 months in September 2022, although it remains below the long-run average of 3.3 months for this time of year. Months of inventory represent the number of months it would take to sell current inventories at the current rate of sales activity.
Breaking this all down into it’s simplest form: September was slow. High inventory combined with low transaction volume means that the demand isn’t as strong - or perhaps that even though demand exists people no longer have the resources to facilitate thier demand and must wait for the market to cool. Prices are still high - despite showing signs of dropping - and interest rates have continued moving up. Currently Canadians do not have high confidence in the market and it’s easy to see why. Moving forward we just have have to wait to see if the Bank of Canada holds steady and how the market will develop moving forward.
Spooky season is around the corner - I hope that doesn;
Stay informed and keep exploring the Ottawa real estate market with me. Whether you're considering buying, selling, or investing, I'm here to assist you every step of the way. Don't hesitate to reach out with any questions or real estate needs. Your satisfaction is my top priority!
