How Much More Will You Have To Offer To Buy That House in Ottawa?

(posted 2021 May 1 by Steve)

The question

How much are people paying above (or below) the list (asking) price in Ottawa?

The quick answer

Overall, most properties in Ottawa sold at, or more than, the list price.  No surprise, right?  But there were exceptions that sold below the asking price.

On average, freehold properties sold for more above list price (with a median of 13%) than condos (median of 8%).  Freehold properties list-to-sale also spread out further, going from 19% less than the list price, to 49% more.  That might be partly because there are more older freeholds than with condos, and these may need more updating, renovating, or repairs which figures into how much people will offer.

Also, on average, any property (freehold or condo) sold for pretty close to the asking price in central Ottawa.  Properties in the three suburbs examined sold for between 11 to 16% above list price, and there was more spread than in central Ottawa.  These areas have newer and bigger homes with more yard space and had more competition of offers, so ending up selling for quite a bit over asking.

Warning: statistics on charts are useful for visually summarizing data.  But this type of summary should not be used to determine the prices of specific properties!

Now for the fun!  Introduction to box plots

There are six columns:  2 for type of ownership, and 4 for areas.

• The box in the middle shows the range of 50% of the list-to-sale ratios, and the lines extending above and below show the ranger of the highest and lowest 25%.

Let’s look at the first (condos) column as an example.

• The lowest value (the bottom of the vertical line) shows that someone paid 14% below the list price.
• The bottom of the box is at the 25^th percentile:  25% of the sales were right at the list price (full price) or below.
• The middle line of the box shows that 50% of condos sold at 8% above list or below.  This is the median (midpoint of the values).
• The top of the box shows that 75% of condos were sold at up to 19% above the list price.
• The top of the vertical line is the useful maximum; you can that some people paid up to 46% above the list price for condos.
• And those dots above?  They’re called outliers – different enough from the rest of the values that they are excluded so that they don’t skew the calculations.  For example, Kanata has one dot at 67% above asking but everything else is no more than 48% above asking.  So it’s shown on the chart to know that it exists, but including it in the line could cause a viewer to think there were several homes sold between 48% and 67% over list price.

Digging deeper

There are many factors at play in buying real estate, but the type of home and the location are usually the prime determinates, so this chart only explores those criteria.  Price is actually the most critical factor for most people, but that’s a more complicated chart – maybe next month!  Note that both condos and freehold properties can be townhouses, but they have different ownership and fee structures.

Just in case you’re interested in reading even more about this way of presenting data:

Box Plot (Box and Whiskers): How to Read One

and

Create a box and whisker chart (Microsoft Excel)

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