‘Starved’ housing market drives prices, bidding wars

Ottawa’s real-estate market is becoming so tight that many homeowners are refusing to put their properties up for sale until they can be assured they’ve got someplace else to go.

“I’ve been in real estate since 2004,” said Paul Rushforth, principal of the firm that bears his name, “and I’ve never seen such a listings-starved market.”

How starved? The Ottawa Real Estate Board reported Monday that there were just 3,028 residential properties for sale at the end of February, along with 1,064 condominiums. That was down 21 per cent and 26 per cent, respectively, from a year earlier.

Rushforth estimates that roughly half of his firm’s sales are the product of bidding wars. He cites the recent example of a Barrhaven townhouse that received 30 offers before it finally sold at $33,000 over the $299,000 asking price.

The result of all this activity has been to push up prices — most notably in the hottest corridors to the west and east of the downtown core, along the Ottawa River.

The benchmark price across the city for single family homes jumped 8.5 per cent to $409,200 in February compared to a year earlier. Benchmark prices are based on an index that standardizes housing features and is considered a better barometer of underlying trends.

Price increases varied widely, ranging from a 28.5-per-cent jump year-over-year for homes in Rockcliffe Park to a hike of just 1.9 per cent in Carlsbad Springs. This result accelerated the already huge difference in home values between these two districts. Single-family homes in Rockcliffe Park fetched $1.5 million in February (the highest in Ottawa) compared to $324,200 in Carlsbad Springs (the lowest in the city).

Price patterns have altered somewhat during the past few months. In February, just six of the top 10 real-estate districts — when measured by price gains — were in the corridor stretching west along the Ottawa River from Island Park Drive to the new Department of National Defence headquarters at 60 Moodie Dr. Last autumn, nearly all the hottest districts could be found there.

What’s changed has been a recent run-up in prices in the most exclusive areas of the city. Districts that include Rockcliffe Park, New Edinburgh and Manor Park have each seen dramatic rises in the value of single-family homes (some of it courtesy of extremely low sales volume, which can skew the percentages). In New Edinburgh-Lindenlea, for instance, the benchmark price in February was $756,500 — up 25.4 per cent from February 2017. This makes it the third-most-expensive district in the city, only marginally behind Carlingwood-Westboro.

Districts in and around Orléans and Blackburn Hamlet were among those reporting the smallest gains in home values, as they have for much of the past year or so. But they were joined in February by districts that form the entire downtown core, Bells Corners and the western rural area of Carp-Dunrobin-Huntley-Fitzroy. For much of 2017, the vast majority of the bottom 10 districts were in the eastern parts of the city.

The Ottawa Real Estate Board on Monday also published data for average residential and condominium sales prices. In February, members of the board sold 729 residential properties for an average of $429,600 — up 2.7 per cent year over year. The number of properties sold was down 5.3 per cent from February 2017.

“Our sales numbers would have been much higher if we had more properties available for sale,” said board president Ralph Shaw.

Board members also sold 250 condominiums in February for an average of $273,200 — up 5.6 per cent year over year. The number of condos sold increased by nearly eight per cent compared with February 2017, suggesting some strength in this part of the market.

However, within the condo market, there was considerable variation in price. Condo sellers in the east and west saw prices jump about 17 per cent year over year (to $306,00 and $336,000 respectively) while condo sales in the downtown core saw prices in February increase a modest four per cent (to $397,000).

Residential properties that sold in February had been on the market for an average of 46 days, down from 57 days a year earlier. Condo sales took an average 70 days, compared to 77 in February 2017.