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Ottawa Valley real estate sales decline for fifth straight month

Although real estate sales in the Ottawa Valley declined for a fifth straight month, the average sale price increased by almost $79,000 over the last year.
Real Estate Getty

Like many unusual trends in the post-COVID world, the usual summer surge of positive residential home sales in the normally busy month of July continued the trend of negative sales figures with only 114 units changing hands, marking the fifth consecutive month of declining sales in the Ottawa Valley.

In July 2021, 160 units were sold which works out to 46 less homes sold in July 2022 or a 28.7 per cent decrease. To make matters worse for those hoping to purchase a home in the once reasonably affordable region located less than 50 kilometres from the Ottawa market, the cost of buying a home listed on the market soared from an average price of $318,016 in July 2021 to $459,370 in July 2022

The $78,354 one-year increase works out to a whopping 20 per cent increase for the homebuyer.

On a multi-year basis, home sales were 40.9 per cent below the five-year average and 34.5 per cent below the 10-year average for the month of July. On a year-to-date basis, home sales totalled 1,132 units over the first seven months of the year. This was down sharply by 25.7 per cent from the same period in 2021.

One thing that has not changed over the one-year period is the fact the Ottawa Valley still remains a seller’s market. For many first-time home-buyers the chance to even look at a home, let alone make an offer is still difficult to do, even for those with approved insured mortgages.

In 2021, there were several media reports in the Valley detailing the wildly competitive real estate market and fierce bidding wars that had realtors shaking their heads at the offers they were receiving.

In the spring of 2021, a 2,500-square-foot home on River Road in Renfrew — listed for just under $1.5 million — sold for more than $1 million over asking at $2.6 million.

Craig Smith, a real estate agent with Engel & Volkers who made the sale, said at the time “there were a lot of people who obviously wanted (the house), and when you have that kind of competition, it drives it up.”

Smith also sold the buyer's previous home, about five kilometres away, for $600,000 over asking. (Listed at just under $1.5 million, sold for $2.1 million.). He noted that the sale was one of the highest over-asking selling prices he’s ever seen in the Ottawa Valley area.

Although the average sale price may be much higher than it was a year ago, the dollar value of all home sales in July 2022 was $52.4 million, a decline of 14.4 per cent from the same month in 2021.

The Bank of Canada’s prime rate, which major lending institutions use to set their individual mortgage rates almost doubled over the same time period. In July 2022 the prime rate sat at 4.70 percent compared to 2.45 percent in July 2021.

The rising interest rates coupled with an average increase of 20 per cent in the average price of a home in the Ottawa Valley, means the ability to afford a home appears to be growing dimmer for many hoping to find that dream home.

One sliver of good news for home-buyers in the recent report published by the Renfrew County Real Estate Board was the number of homes available on the market. The number of new listings rose by 22.9 per cent from July 2021. There were 236 new residential listings in July 2022.

The flip-side of that number is the fact active listings were 34.1 per cent below the five-year average and 59.8 per cent below the 10-year average for the month of July.

One statistic that stands out is how the average sale price in the Ottawa Valley is doing compared to the overall Canadian real estate market. According to the housing statistics report released by the Canadian Real Estate Association (CREA) on August 15, the average home sale price was 629,971, down five per cent from $662,924 last July.

The Ottawa Valley sale price increased from $318,016 in July 2021 to $459,370 in July 2022, which represents an increase of 20.2 per cent, far above the Canadian average.

The CREA report shows housing activity returning to pre-pandemic levels, and the housing market continuing to stabilize after two pandemic years that set Canadian housing activity ablaze with record-setting sales prices and selling volumes.

Whether the Ottawa Valley also bucks that Canadian trend will be determined when the August sale numbers are released next month.

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