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  • Writer's pictureThomas Desjardins

February 2023: Ottawa Real Estate Market Update

Updated: Mar 7, 2023



Ottawa Real Estate Market in Context


The real estate market in Ottawa saw another slow month in February. Compared to February 2022, only half as many homes were sold in February 2023. Buyers remain hesitant, while sellers have been equally slow to re-enter the market. The number of available homes has remained higher than usual for this time of year given the lack of demand, however, bidding wars have returned on well-priced listings in desirable neighbourhoods.


Despite the small volume of sales so far this year, month-over-month prices have risen 4.5% since December. This is in contrast to year-over-year prices, which remain significantly lower than at this time last year. As we move into the latter half of 2023, we expect to see annual prices return to positive figures.


Let's take a look at some core indicators, within the context of wider market trends, for last month.


Number of Home Sales (Year-Over-Year)

  • Residential unit sales: 802 (-44.2%)

  • Freehold unit sales: 594 (-46.6%)

  • Condo unit sales: 208 (-36.2%)

* Residential sales include all residential properties; freehold includes detached singles, townhouses, and semi-detached homes; and condos include apartments, row units, and stacked-style dwellings.


In February, the pace of home sales remained significantly slower compared to recent years. In fact, 2023 was the slowest February in over a decade. Only 802 homes traded hands last month, which is 33% less than the 5-year average for the month of February, and nearly half the number of sales that we saw at this time last year.


The graph below shows monthly sold unit data over the last five years.



Average Sale Prices

  • Residential properties: $632,906 (-15.6%)

  • Freehold properties: $710,330 (-14.7%)

  • Condo properties: $410,929 (-12.7%)

Given the distorted numbers we saw in Q1 of last year, year-over-year sale price data will continue to look bleak through winter and into spring. Month-over-month numbers, by contrast, show a more stable picture. Average prices increased by 3.6% from January to February. This follows a 1% increase from December to January. While it's too early to announce that we have reached the bottom of the market correction, we will be keeping a close eye on prices as we move into the typically busy spring season.


The table below shows month-over-month price change data since January 2022. The following graph shows monthly average sale price data since the beginning of 2018.

Month

Price

% Change

January 2022

$680,276

10.92%

February

$750,496

10.32%

March

$758,969

1.13%

April

$739,583

-2.55%

May

$718,998

-2.78%

June

$686,752

-4.48%

July

$649,602

-5.41%

August

$635,982

-2.10%

September

$644,905

1.40%

October

$624,692

-3.13%

November

$620,889

-0.61%

December

$605,282

-2.51%

January 2023

$611,504

1.03%

February

$632,906

3.60%



Active Listings by Month


At the end of February, there were 2,336 homes available for sale in Ottawa representing a 14-unit increase from the previous month. While 1,316 of those listings were "new", cancelled, suspended, and expired data suggests that the majority were re-listed and are in fact carry overs from previous months. For buyers actively looking for a home, this explains the seemingly slim options available in the marketplace. The chart below shows the active listing data for the last 5 years.



Cumulative Days on Market


Cumulative days on market (CDOM) refers to the total number of days that a home is available for sale before it is sold firm. CDOM includes the time that a property spends conditionally sold or the time that the property is available before being cancelled and re-listed. This replaces the "days to sell" metric that we previously used since it offers a clearer picture of how long sellers can expect their property to stay on market before selling.


Last month, a home took 62 days to sell, on average. This number is down from January when homes sold in 70 days. This is the first time since the downturn began in April that CDOM has decreased. CDOM data since 2018 can be found in the table below.



Months of Inventory


The months of inventory measure ("MOI") is calculated by taking the number of homes available for sale and assessing how long it would take for those to sell if demand remained constant and no new inventory was added to the market. This measure is a core indicator that helps assess whether we are in a buyer's, seller's, or balanced market.

  • A balanced market has 4 to 6 months of inventory.

  • A seller’s market has less than 4 months of inventory.

  • A buyer's market has more than 6 months of inventory.

In February 2023, 2.8 months of inventory were available, compared to 0.7 in February 2022. Freehold properties increased to 2.9 months from 0.7 months in 2022. Condominium-class properties increased to 2.6 months from 0.7 months in 2022.


While these figures technically place Ottawa in a seller's market based on this specific metric, the market has cooled significantly since the peak in the first quarter of last year. For context, MOI numbers around 8 were common in the not-so-distant past. This is illustrated in the chart below, which shows MOI data by month since 2014.



Historical Average Home Prices in Ottawa (1956-2022)




What This Means for You


It is critical to note that broad aggregate data is useful to establish trends, but significant variability exists at a community and housing-type level. If you are interested in getting a more refined estimate of the value of your home, or if you are interested in beginning your house hunt, please feel free to get in touch.


* Real estate market data is taken from the Ottawa Real Estate Board's Multiple Listing Service (MLS) and is believed to be accurate but is not warranted.



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