"December broke the record for the highest number of residential and condo properties sold..." says the president of the Ottawa Real Estate Board. You can read the whole press release here.
Here's the scoop on this December, compared to the same month last year:
The number of residential properties sold outpaced last December by more than 10%. With properties taken off the market for the holiday season, we saw the active listing inventory continue to come down, putting the market in a stable position to start off the new year.
Freeholds entered a buyer’s market position, while condos remained in a buyer’s market, based on the sales to listing inventory ratio.
Inventory absorption remains high for condos, reflected in the average price decrease over the same month last year; while freehold prices increased, with a swift inventory absorption rate.
* What’s Inventory Absorption Rate?
It's the number of months it would take to sell off existing listing inventory, at the current pace of sales, with no new listings coming onto the market. It measures supply and demand in the housing market. To put it into perspective for you: In the mid 1990s the absorption rate in Ottawa was around one year. The hard hit American cities during the 2009 financial crash had absorption rates of two to three years. The hot Ottawa markets of 2007 and 2009 had absorption rates of less than 3 months. The present absorption rate for Ottawa freeholds trending at 4 months would indicate stable or slightly rising prices, while a 7 month absorption rate for condos would indicate decline in prices.
Why is it important to watch? When it’s high, buyers have a lot of choice, and sellers have a lot of competition, which puts downward pressure on prices.
** Sales to Listing Inventory Ratio is an indicator of market balance.
- “Balanced Market”: where 15-25% of the available inventory sold.
- “Buyer’s Market”: <15%, where supply is high and demand is low. Buyers are favoured. Prices decrease.
- “Seller’s Market”: 25%+, where supply is low and demand is high. Sellers are favoured. Prices increase.
Remember, average price is just an indicator, and should not be used to determined the value of your home! Contact Anneke to request a detailed evaluation of your property.