The only thing spooky about the market in October was the still MIA inventory
Missing: inventory, Reward: a balanced market
“Spooktober” didn’t really deliver anything too spooky when it came to real estate. The October market was stable and had quite a bit of action, as it usually would, pre-pandemic.
The number of properties sold (1,677) was indeed lower than last year’s October (2,132), thanks to the COVID-19 lockdown we had back in 2020 that delayed market activity, bringing unusually high numbers into the fall. But compared to sales in September (1,607), and October's own five-year average (1,605), October 2021 actually came out on top.
Got 99 problems and inventory is all of them
If the Ottawa real estate market did a remix of Jay-Z’s “99 Problems,” that’d be the hook. With 1,960 new listings last month, it’s nowhere close to achieving the balanced market we dream of. At the moment, there’s a one month supply for residential properties, and a 1.2 month supply for condos, and the reality is that there needs to be 4-6.5 months supply for a balanced market. Low inventory also means prices are still on the rise.
The Ottawa Real Estate Board President Debra Wright explained this existential crisis and it’s quite the head scratcher. So, lack of inventory means less options, causing those who are looking to move-up or downsize to stay put. But without their properties entering the market and that healthy exchange going on, there aren’t enough suitable options for new buyers, making it harder for them to get their foot in. See the pickle we’re in?
The board did share an interesting hypothesis though—that investment properties might be one of the culprits of low inventory. You see, there’s been a significant increase in rentals recorded through MLS this year compared to the last. 4,012 rental transactions since the beginning of the year to be exact, while this time last year, there were 2,829.
As it turns out, the future of inventory is still the cliffhanger we’re clinging onto—only now with the end of season 1 of Squid Game as a close second.
A note for buyers and sellers
Don’t be discouraged! We’ve been with the market for a long time and it’s nothing we can’t help you navigate through with our experience and expertise. If you’re thinking of participating in market activity, whether it’s buying or selling, we’d love to be on your team! Reach out to us at firstname.lastname@example.org and let’s get the exchange going!
- The Ottawa Real Estate Board: October’s Resales Track a Traditional Cycle
- CTV News: Lack of housing supply driving up home costs in Ottawa, report says
- Ottawa Citizen: Real estate: There's still a COVID-19 resale price premium for homes in the Ottawa Valley