Ottawa Real Estate Monthly - December 2024

The winds of change continue to blow through the Canadian economy and real estate market, keeping us on our toes in the Nation's Capital. Those winds have recently buffeted the Ottawa real estate agency world as well. The Ottawa Real Estate Board has implemented a major MLS database and toolset change. This change has created the opportunity for me to revitalize my data tracking and the way I portray market intelligence to my clients, and to those of you kind enough to spend a few minutes with me each month reading this newsletter. On with the show...

I have redesigned my market snapshot. The new format provides a classification that I believe aligns more naturally with the way most people think about property types. It is also the same classification that the new database structure (which is standards-compliant where our old database was not) reflects and that CREA reports.

The disadvantage of my new snapshot format is that it might be a bit overwhelming at first - there is a lot of information in a compact tabular format. I've placed emphasis to guide interpretation (softly highlighting sales and average prices: the two primary statistics, and the ones my old snapshot exclusively included). I think with practice viewing it, you'll find it gives you a very quick feel for the momentum of the market along with the detail you need (if you spend more time with it) when you're actively working to buy or sell.

There are four tables:

All single family residential properties.

For years, OREB's residential data mixed in some multi-unit properties but not others. The data and my snapshot now represent any property whose use is single family - whether that is a condominium apartment, detached house, or townhouse.

Detached & semi-detached homes.

This include those with secondary dwelling units (but not duplexes).

Townhouses.

This includes freehold townhouses, condominium townhomes (i.e. "garden homes"), and stacked townhomes (freehold and condominium). Essentially, all row units. Some townhouses might also feature secondary dwelling units.

Apartments.

These tables include all properties in the greater City of Ottawa. I will build similar tables for the remainder of Eastern Ontario since I work with clients in Ottawa and throughout Eastern Ontario to buy and sell properties for home or investment.

Today, I'm going to leave you with the data without detailed commentary on each table. Please click on each table to open it larger in a separate browser tab. I provide some overall observations on all four tables collectively this month.

Lastly, for my graph-loving friends and visual processors - have no fear. In place of my long-serving 36 graphs of 12 metrics by broad property class, I plan to share custom graphs on monthly topics of interest (perhaps comparing two neighbourhoods, different geographic areas, a long-term trend, or exploring the interplay between two different metrics).

The New Snapshot

All Single Family Residential Properties

Detached and Semi-Detached Single Family Properties

Townhouse & Stacked Townhouse Single Family Properties

Apartment Single Family Properties

Snapshot Observations

Sales Activity.

Sales of homes across the three property categories were fairly consistent, with the most prominent exceptions being slower sales year-to-date of townhouses and higher sales year-to-date of apartments, relative to year-to-date sales in 2023.

New Listings.

New listings are up year-to-date over 2023 while in November they were 5.3% lower than last November.. We can only guess why sellers are pulling back earlier this Winter. It could be the weather - last year Winter started late and never got into full swing. It could be the possibility of lower interest rates driving a stronger Spring market in 2025 and sellers want to hold off for higher prices. New apartment listings surged in November.

Inventory.

Active listings sitting on the market are up across the board compared to 2023. Inventory levels have now been restored, post pandemic listing drought, to levels not seen for more than 7 years. There is almost a glut of apartments on the market with more than twice as many as there were at this time last year.

Sales / New Listings.

With sales continuing their uptick in November but new listings backing off slightly, the performance ratio of sales to new listings bumped up to 78% overall. New listings and inventory year to date being well above 2023 you might expect this ratio to be headed for buyer's market territory (below 40%) but it has only lost about 4% compared to last year to date. This speaks to sales picking up and the market stabilizing. Detached homes and apartments remain in neutral territory year-to-date (between 40% and 60%) while townhouses are in seller's market territory at 62.3%. Sales of townhouses are weaker relative to 2023 compared to the other two categories, but the lack of new listings is keeping this ratio high.

Average & Median Sale Prices.

Home prices year-to-date (month over month prices can indicate seasonal trends but the smaller sample size results in fluctuations that don't necessarily reflect market conditions accurately) are within 2% of prices achieved in 2023 for the most part. The notable exception is townhouses which are up about 4 - 5% due to the high sales to new listings ratio noted above.

Sale Price to Asking Price Ratio.

This ratio is one that is frequently mis-used by realtors in portraying marketing performance and misunderstood by buyers and sellers alike. It is not a metric that should be applied to assess individual property values or marketing performance. This is a good topic for an insights article that I will note and hope to address sometime in 2025.

The average ratio across a large sample of property transactions tells us nothing about property values, but is an excellent indicator of buyer and seller behaviour, which is a crucial input to pricing strategy for sellers and offer management strategy for buyers and sellers.

The key takeaway from current statistics is that the market is behaving almost exactly as it was last year. Buyer leverage on price for the three categories of properties currently falls in this order (from most to least leverage): apartments, detached homes, townhouses. Sellers are not flexing beyond 2% of asking price across the board, but the market is behaving "normally" with sale prices falling below 100% of asking prices.

Ottawa Market - 10-Year Context

New Listings, Sales, & Price Performance

Below is a live graph of all single family residential sales and new listings by month in 2024. December's data is obviously incomplete - we're still working on the AI model to predict all the stats instead of having to wait for the market to play out.

That last part was a joke.

Click on the link below to open a live version of the graph in a browser window and you'll be able to scroll over each bar to read the numeric data.

Live Graph

I've superimposed (dotted red line) the ratio of selling price to asking price achieved for the homes that sold each month. You will notice the clear seasonal trend in the power struggle between buyers and sellers. Buyers have the most leverage in Winter, second most in Summer, less in the early Fall and least in Spring. No surprise, but interesting to see statistical confirmation in graphic form.

Normalized Home Price Trend

Average and median home prices are the most interesting market fact for most people. There are inherent problems with these figures, however, when trying to understand price trends across a broad market.

Looking at homes comparable to the one you are buying or selling, we compare prices of known quantities and can make adjustments for differences. This is the process of estimating the probable market value of a unique piece of real estate.

But looking at average prices and drawing conclusions about the value of your house or even homes in your neighbourhood can be misleading. Average home price figures across Ottawa don't account for the fact that, for example, apartments make up a much higher portion of the housing stock downtown while townhouses are almost unheard of, and the opposite is true in the suburbs.

Enter the House Price Index or HPI. This is a normalized price statistic that uses canonical property descriptions and factors into the final figures the weighted mix of housing stock in each area.

Below is a graph of the HPI for the overall Ottawa single family residential market for the past five years. You can clearly see that home prices were rising pre-pandemic, experienced two significant bumps upward during that crazy time, and have stabilized since, with curves that essentially follow the seasons.

Speaking of Seasons

It is that time of year. I wish for each of you a safe, memorable, and joyful Holiday Season and a healthy and prosperous year in 2025. Not everything will go the way we want, but with perspective and perseverance, optimism and effort, we move forward and upward. In real estate, the future is always unknown, the present is challenging, and the past is fascinating.

Cheers.

Thank You

Thank you for reading my newsletter (remember to subscribe if you enjoyed it and would like a monthly breakdown about Ottawa Real Estate in your LinkedIn feed).

Have a real estate question? Reply to this email, text or give me a shout.

Is someone you know thinking of moving or investing in real estate?

I would love to help; if you feel comfortable introducing us, please do.

Bruce Brown, Real Estate Broker, Certified Executor Advisor

Cell / Text : 613.859.6268

Email : [email protected]

RE/MAX Hallmark Realty Group, Brokerage

Brokerage : 613.236.5959