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Part 1: Welcome 2020!
It’s late December 2019, Orleans Real Estate has taken a little bit of a break, along with everyone else. I’m at home, spending time with my family and loved ones over the couple weeks of Holidays. As the days go by, I realize that it’s almost time to get back to the grind, but before doing so, I need to make sure to have a realistic business plan for 2020! As the great Benjamin Franklin once said, “by failing to prepare, you are preparing to fail”, nothing could be truer than what was to come in 2020. I set out my business goal planning and was very optimistic about the year to come in Real Estate.
Some of the reasons I was optimistic about the Ottawa and Orleans Real Estate market were that 2019 started and ended with some of the highest sale prices we’ve ever seen. Throughout the year we noticed such low inventory in the market which consequently followed one of the oldest economics laws, of supply and demand. Demand was still extremely prevalent especially within the $300,000 to $500,000 price range and the supply for these priced homes was low. So what happened? These forces in the market moved the pendulum towards the Sellers which helped further push the Ottawa market into a Sellers’ market. I could anticipate this trend continuing in 2020, especially after attending a presentation from CMHC (Canada Mortgage and Housing Corporation) on the future outlook of the Ottawa Real Estate market for 2020, 2021 and into 2022. Therefore, one of my main areas of concern for 2020 was to get more listings and be acutely proactive in preparing with my buyer clients.
The new Year is here, let’s get back to work! I’m working with multiple clients, from Sellers, to Buyers and Renters. As predicted the market is still very competitive, and there’s still isn’t much inventory for Buyers and Renters to choose from in Orleans. Listing prices are higher than the previous year, months of inventory is sitting at 1 month (the lowest it can go), a typical balanced market is anywhere between 5-9 months of inventory. We’re hosting Open Houses, tons of people are coming through, listings are overly active, there are plenty of overlapping showings (when 2+ agents show up with their clients at the same time to visit a home), homes are going into bidding wars, multiple offers and selling way over price. I think to myself; this is the new normal that we will have to manage throughout the year. I discuss with all my clients the different scenarios and strategies which are currently commonplace in the Orleans and Ottawa market. Townhomes and terrace homes are a remarkably hot commodity as they fall into the previously mentioned competitive price range. Sellers are extremely happy with their sales; Buyers are getting restless about losing bidding wars and seeing homes sell for way over the listing price. These first two months of the year were especially challenging with my relocation clients, coming in for a “house hunting trip”, where they have to purchase a home during the 5-7-day window period that they are in Ottawa. Luckily for us we were able to find each one of them a home within that time frame, but I could definitely feel the stress, pressure and market frustration from my clients.
In February we saw much of the same as in January, except home prices continued to increase. They increased both on the listing side and selling side. Days on market in Orleans reduced from 25 in January to 18 in February, while active listings remained pretty much the same. I remember thinking to myself, what is going to happen when the Spring market hits, typically our busiest time of the year, how much are these townhomes going to sell for? Will we see townhomes in Orleans sell for over $500,000?
As all of this was happening a pandemic was starting to spread overseas, could it make its way to Ottawa, and would it affect the Real Estate market?
We all now know what happened, but how did it affect the Ottawa and Orleans Real Estate market?
Read part 2 of my mini series to find out!
