Chances are, you’ve heard some news about the Canadian real estate market shifting. It’s a hot topic and everyone seems to have an opinion. Whether you’re planning to buy or sell real estate in Ottawa, the shifting market will have an impact on you.
However, the best course of action in a shifting real estate market is to work with an experienced local Ottawa real estate team.
Let’s take a closer look at some of the reasons why.
First, here is a quick recap:
What is a Seller’s Market?
Ottawa–and Canada in general–has been in a Seller’s Market now for the past few years. A Seller’s Market is defined when there are more active buyers in the market than there are available homes to purchase.
In a Seller’s Market, you will typically see prices increase and multiple offers become more common. There is more competition and homes will sell above the list price. Homes sell faster and typically with fewer or no conditions.
What is a Balanced Market?
A Balanced Market, as the name implies, is when supply meets demand. There is enough housing inventory available to satisfy active buyers in the market. In this type of market, there is a sense of calm. Homes can still sell relatively quickly, but prices tend to sit at market value, only rising enough to keep up with inflation.
What is a Buyer’s Market?
A Buyer’s Market is defined as when there are more listings in the market than there are buyers to purchase them. In this type of market, we will typically see homes selling below the asking price and with more conditions. Homes will sit unsold for longer, and buyers will have more negotiating power.
What Type of Real Estate Market is Ottawa In?
For the past several years, Ottawa has been in a competitive Seller’s Market. Inventory was low and there were many buyers in the market looking to purchase. As a result, we saw prices increase and multiple offers or even bidding wars become common.
However, the market is beginning to shift.
Many people think Ottawa is now in a Buyer’s Market, but we would have to disagree. The market still favours sellers, but there is a definite transition into a more Balanced market these days.
The recent 1% Policy Rate increase from the Bank of Canada this month should help to further cool the hot market, but many experts are predicting that we will still remain in a balanced market that slightly favours sellers for the next while.
Why is the Ottawa Real Estate Market Shifting?
There are a plethora of reasons why the real estate market is shifting, but the major catalyst to the change is the Bank of Canada’s interest rate increases these past months.
During the pandemic, the Bank of Canada slashed interest rates to almost 0%. It was an emergency strategy they enacted to protect the Canadian economy and give people more borrowing power in a time of crisis.
However, as the Canadian economy recovered from the pandemic, the low interest rates began driving up inflation. The Bank of Canada needed to take action and return interest rates back to normal to offset rising inflation.
The Bank of Canada is hiking rates gradually throughout the year. The most recent benchmark increase was a 1% hike that brought the Bank of Canada Policy Rate to 2.5%. This is close to the rates we saw in 2018 and 2019, before the pandemic. These increases will help slow inflation, but they will also cool the hot real estate market, which is actually good news for the average Canadian.
How Will the Shifting Real Estate Market Impact Ottawa Homeowners?
One of the reasons why Ottawa is a great city for real estate is because we are relatively sheltered from major economic changes or crises. As a government town, our economy is stable with a high average household income.
That being said, the shifting real estate market will still have an impact on anyone trying to buy or sell a home in Ottawa.
Here are a few of the changes you can expect if you are selling your home in Ottawa:
- Home prices will moderate, and pricing your home correctly to sell will be important.
- Home preparation will also take center stage, buyers will have more negotiating power and will expect home repairs and staging when viewing homes for sale.
- Homes will likely sit on the market for longer before selling.
- There will be fewer showings and offers on homes.
- Offers will likely have some conditions.
Conversely, here are a few things you can expect if you want to buy a home in Ottawa:
- Prices are moderating but not dropping significantly.
- You will have more time to view homes and consider your offers.
- There will be less competition on homes and you will not experience as many bidding wars.
- You can be more strategic with your offers and include conditions. In this type of market, the highest bid is not necessarily the winner, conditions are also key.
Looking for more reasons to relocate to Ottawa? Read our blog with everything you need to know about moving to Ottawa right here.
Why You Need an Experienced Ottawa Real Estate Team in a Shifting Market
A changing real estate market can make anyone nervous, however, an experienced Ottawa real estate agent has seen all types of market conditions. They know how to succeed in a Buyer’s Market and a Seller’s Market, because they’ve been around long enough to see them both.
Selling your home in a Seller’s Market vs. Buyer’s Market is completely different and you only truly learn the nuance when you experience it. Buying a home is different in each type of market, too, and an Ottawa real estate agent with a long track record, like the Chell Team, is certainly better positioned to help you succeed in both.
Looking for more reasons to work with an experienced Ottawa real estate team? Read some of our other blogs on the topic here:
- 9 Benefits of Selling Your Home with an Experienced Ottawa Real Estate Agent
- 6 Advantages of Working with an Ottawa Real Estate Team
An experienced real estate team also works together to serve their clients, and when you have the resources, insights, and strategy of an entire team of experienced REALTORs® behind you, you can feel confident about making choices that will best benefit your unique situation.
Additionally, a local Ottawa real estate team knows the area better than anyone. They understand the unique neighbourhoods, and they are well aware of the trends and new developments.
Are you curious about making real estate decisions in a shifting market? Whether you are buying a home in Ottawa or planning to sell soon, the Chell Team is your resource for up-to-the-minute information and knowledgeable advice.