It’s an illusion of course — the fact that average residential house prices in Ottawa surged 16.5 per cent to $559,740 in March, while condo prices jumped 27.3 per cent to $369,300.
These rather startling numbers, published Friday by the Ottawa Real Estate Board, relate to properties sold on the multiple listing service. While true for the month as a whole, the snapshot comprises two sharply divergent realities.
The first half of March witnessed a market on fire, filled with bidding wars and marked by sharply escalating prices. But, once physical distancing connected to COVID-19 kicked in around mid-month, the resale sector transformed.
“Three weeks ago, we were seeing 13 buyers for every property,” said Chelsea Hamre, an agent with the Hamre Real Estate Team, which markets its services under the RE/MAX banner, “Now there are just three or four” buyers for every property.
One other important distinction: Hamre’s sales in the past two weeks have been done virtually, using a combination of online tours, FaceTime and other collaborative software.
“We’re all working from our home offices,” she said, noting the four-person team — a family operation — has been selling an average of one property every one-and-a-half days. That’s roughly the same as during the first half of March.
The difference now is prices are just one per cent to three per cent over asking, compared to 10 per cent to 15 per cent in the first half, Hamre points out, citing city-wide data. It’s also important to note sales volumes would normally be ramping up for the traditionally busy spring season. That almost certainly won’t happen without some breakthroughs in the detection and treatment of COVID-19.
Because the Ottawa Real Estate Board did not provide a breakdown for its March data, we can’t be precise about how much physical distancing and the virus have already affected the local resale market.
However, the Toronto Real Estate Board offered some good insight earlier this week into how the resale market switched gears mid-March.
Between March 1 and March 15, the average price for residential and condo properties sold across greater Toronto was $931,800 — up 17 per cent compared to the same period in 2019. In the second half of March, the average price slipped to $862,600 — up a more modest 10.5 per cent year over year.
This suggests COVID-19 has depressed price gains only somewhat. The real shift within the month was in the volume of sales. Consider that agents in greater Toronto sold 4,643 properties by mid-March — representing a 49 per cent surge from the same two weeks in 2019 — while in the second half of March, the number of properties that changed hands fell to 3,369. That was down 16 per cent year over year, a dramatic shift in momentum.
In Ottawa, the number of sales for March as a whole was roughly 1,500 this year and last. This left just 1,420 residential properties still listed at the end of last month while the inventory of condos for resale was 253 — down 35 per cent and 63 per cent respectively compared to a year earlier.
Yes, people are still listing properties, such as those who sold their homes early in March and now are desperate to buy.
“People who are just thinking of buying have put decisions on hold,” says Hamre. “Those who must buy or sell are still in the market.”
One option for people who can’t find existing properties is to buy new. The Ontario government squeezed this potential source of supply on Friday by announcing a shutdown, effective April 4, of all residential building projects except those for which footings had already been poured.
Copyright Postmedia Network Inc., 2020
