Ottawa Real Estate During the COVID-19 Pandemic
You may have heard that real estate is considered an essential service in the province of Ontario.
How is the Covid 19 Crisis affecting the Ottawa Real Estate Market?
There are many reasons that people are continuing to buy and sell real estate. A new home was bought and the current home must be sold. A new job that requires a move, or debt, or medical reasons, or a death – are just a few of the reasons that may exist that require buying or selling. What has changed now though, is that many people are delaying a purchase or a sale if they don’t have to at this point.
What has happened with the self-isolation requirements is that many people – both buyers and agents – are reluctant to visit properties, and many sellers are also reluctant to have people going through their homes.
As you can see from the main chart above, both new listings and sales of Ottawa real estate took a nosedive at the beginning of March when the Covid 19 procedures were started. Numbers would typically be continuing to rise this early in the busy spring market, which is apparent in the chart for listings and sales in 2019.
How has the Covid 19 Crisis affected prices in the Ottawa Real Estate Market?
Reviewing the average list price to the average sold price is interesting as well. 2020 started out continuing the “feeding frenzy” of 2019, where most homes sold for significantly over the asking price. By the beginning of March, buyers were paying an average of 7% above the asking price.
That has now dropped dramatically. With fewer buyers willing to see homes, and many sellers restricting showings, there is less opportunity to produce multiple offers (aka “bidding wars”). Therefore sale to list prices are just a bit over the list price now.
Average prices appear to be on the rise again since mid-April, but this can be due to a different mix of properties, and with fewer sales that can affect the stats. Also, people who held back from buying or selling may have reached the point where they must do so.
Below are two charts for each of 2020 and 2019: for listings to sales, and for prices. Note that the 2019 charts extend an extra month to the end of May.
In the listings to sales for 2019, you can see what a more typical year looks like: rising until the end of April then levelling off in May.
2020, as mentioned above, shows the impact of the “stay at home” guidelines.
Notice how the average list price to sale price started at only a bit about 98% in January of 2019, and only went as high as 1% above asking by the end of April 2019 before coming back down (the end of the year was a different story of course with multiple offers and much over asking being the norm).
2020 continued the hot market that ended 2019, and started with a roar at with an average of almost 5% over asking! That ratio kept rising until the beginning of March when it began dropping to end at about 1% over asking by the week ending April 18.
We still don’t know when this “new normal” will end.
However, Steve, Judy and I continue to help people who require purchasing or selling real estate – with extra precautions. From new procedures to new forms to wipes and disposable gloves, extra detailed videos and photos, we work to safeguard the health of everyone involved.
Click on a chart to see it full size.
Note that the charts for 2020 are up to about the end of April whereas the charts for 2019 continue to the end of May to give a better idea of the typical progress of listings, sales, and prices.
Barring a drastic turn of events with higher numbers of hospitalizations and deaths, we expect that the Ottawa real estate market will start picking up again. There are sellers and buyers who were able to postpone transactions but who are now reaching the time where they will have to proceed.