Ottawa Valley home sales in May marks third month of decline

The continued decline of home sales and reduction of inventory in Renfrew County is a trend that realtors, along with buyers and sellers, were hoping would turn around as the month of May is traditionally a strong indicator for a busy summer.

However the highly anticipated surge of May sales did not materialize. The number of homes sold in the Ottawa Valley was only 201 units, a whopping decline of 22.7 percent from May of 2021. Those home sales reflect all units on the market, both old and new homes builds. The strongest area for real estate sales was in Arnprior which reflected the impact of the Highway 417 extension and proximity to the Ottawa market.

The May 2022 stats marks the third consecutive month that sales and available units for sale has been recorded in double digits and local realtors are hopeful the total number of June sales rebounds enough to bring the numbers back up to the traditional summer sales.

Demand continues to outpace supply as new home listings were down nearly 30 per cent over last year. Active listings also saw a sharp decrease, down 27 per cent.

There is genuine concern the downward trend may continue through the remainder of the year and the Renfrew County Real Estate Board said that active listings have not been this low for the three-month block (March-April-May) in two decades.

Home sales were 17.1 per cent below the five-year average and 11.2 per cent below the 10 year average for the month of May.

On a year-to-date basis, home sales totalled 843 units over the first five months of the year. This was a substantial decline of 26.4 per cent from the same period in 2021. It is a far cry from what the market experienced the previous two years. 

Since early 2020, at the same time the COVID-19 virus was entering the pandemic phase in Canada, the overall price and volume of real estate sales in the Ottawa Valley began an upward climb going from an average price of $230,000 to a high of $494,000 in December of 2021. 

The onset of COVID-19 in early 2020 started a slow but consistent rise in the number of working and retired Canadians leaving several medium and large urban centres with many settling in smaller rural communities within a day's drive of their former urban homes. 

If there is any silver lining for the first half of this year it is the value of home sales. For the most part, homeowners who have listed their properties in 2022 have seen an increase in the value of their property sales. The average price for home sales as the average price of homes sold in May 2022 was $475,056, a gain of 21.5 per cent from May 2021.

The more comprehensive year-to-date average price was $490,200, up by 25.4 per cent from the first five months of 2021.

Although the number of new listings saw only a moderate decrease of 5.2 per cent from May 2021, it is a decline nonetheless and similar to home sales, it marks a third consecutive decline which had only 307 new residential listings in May 2022.

New listings were five per cent below the five-year average and 16.1 per cent below the 10-year average for the month of May.

In terms of the number of active residential listings numbered 241 units on the market at the end of May, a substantial decline of 16.9 per cent from the end of May 2021. Just as home sales are hitting record lows, the active listings haven’t been this low in the month of May in two decades.

With interest rates expected to rise over the next year in an effort to reduce the level of inflation, there is a concern among the 140+ realtors in the area that rising interest rates combined with record high interest rates will only make the decline in sales worse as the year goes on.