It’s not just the temperature that is dropping around the Ottawa Valley, but housing sales are dropping and it seems the local real estate market just can’t break out of this nine-month slump and with just six weeks left until December 31, it is likely 2022 will have comparable numbers to the housing crash of 2009 when overall Ontario sales fell by 20 per cent that year.
Home sales in Renfrew County declined by 13 percent from the same month the previous year as the number of units sold totalled 120 for the month of October 2022. Unfortunately, the Ottawa Valley is not following the national trend of slowly increasing sales throughout the provinces since August.
The latest numbers from the Canadian Real Estate Association (CREB) show sales nationally were up 1.3 per cent month-over-month in October, though non-seasonally adjusted activity came in 36 per cent below the same month last year. On a year-to-date basis, home sales totalled 1,518 units over the first 10 months of the year. This was a decrease of 25.6 per cent from the same period in 2021.
In terms of annual sales, the October numbers were down, but they did improve over the previous month’s total. September marked the seventh straight month that the number of homes sold was down, but it decreased by an incredible 38 per cent from the total sold in September 2021.
The Ottawa Valley home sales stacked up poorly in terms of historical sales numbers. Overall, home sales were 19.2 per cent below the five-year average and 9.4 percent below the 10-year average for the month of October.
Once again, the only silver-lining during this nine-month slump is for homeowners who have seen the average sale of homes recorded at an increased price of $448,264. That is a 7.3 percent increase in price from last October.
In relation to sales prices in 2021 when housing sales set record highs for the latter part of the year, with a more comprehensive year-to-date average price of $468,860, which worked out to an increase of 17.3 per cent from the first 10 months of 2021.
Compared to the rest of the province, the dollar value of all home sales in October 2022 was $53.8 million, a moderate decrease of 6.7 per cent from the same month in 2021.
With annual sales on a downward trend for most of the year, there is some concern the trend may continue into next year which will slow down an already slumping housing industry. The trend has similar traits to the Canadian housing crash of 2008, with Canada and several other countries suffering from the downfall of the American housing bubble burst.
Canadian homeowners felt the effects when mortgage rates almost doubled within a year in 2008 and today, rates have almost doubled over the last year. The housing crash was a national crisis when new housing starts dropped to 118,000 from an average of 175,000. Sales of existing homes fell by 40% from their peak. The national resale price for a house dropped by 9.5 per cent and new home prices fell by 3.5 per cent. For many Canadians, their homes lost significant resale and for some, they never recovered.
In Canada, home prices have dropped 22 per cent since record highs in February, are forecast to drop by another 11 per cent in 2023.
TD Bank predicts that housing sales will bottom out at about 20 per cent below their pre-pandemic levels in the early part of 2023 due to rising interest rates that along with astronomical prices have made home-buying unaffordable for most Canadians.
There were 168 new residential listings in October 2022. and new listings were 2.6 per cent below the five-year average and 6.9 per cent below the 10-year average for October.
Active residential listings numbered 345 units on the market at the end of October, an advance of 60.5 per cent from the end of October 2021.The units make up part of the active listings. Those units were 20.7 percent below the five-year average and 52.2 per cent below the 10-year average for the month of October.