Ottawa realtor addresses five current myths with the housing market
The dizzying, bionic two years of a record-setting sales pace in Ottawa’s real estate market has certainly slowed and realtors describe a return to normal levels.
That return to normalcy though has stirred up fears and many misconceptions, says Taylor Bennett of Bennett Property Shop Realty.
Bennett is the co-host of The Bennett Real Estate and Wealth Show on Newstalk 580 CFRA and regular contributor to CTV Ottawa’s News at Noon.
"I spend a great deal of my time acting as a therapist for people who are worried about the market," says Bennett
He says he hears many myths and misconceptions, many times a day, every day from nervous clients. He wants to correct them to help quell clients' anxiety.
Taylor Bennett on Five Current Myths
Myth: "Sales are down, the market is crashing"
"While sales are down compared to last year, it's important to put the last year into context - 2021 was the best year for real estate, setting both sales and price records," Bennett says.
"So, a comparison to the best year on record is like comparing an NHLers season stats to Wayne Gretzky's best year - it's not going to look very successful. But when you pull back and take a broader look, we are currently on the same pace as we were in 2019 - the third best year on record."
Myth: "There are no more multiple offers, I can low-ball sellers"
"While it's true that there are fewer multiple offers than before, there are still some occurring on well-priced and unique homes. But even in transactions where it's one seller vs one buyer, on average, homes are selling for $10,000 more than their list price so buyers should be prepared to pay the asking price," Bennett said. "However, buyers do get an advantage as they now have the opportunity to perhaps work in a condition or two for added protection."
Myth: "Homes are taking longer to sell, sellers are panicking"
"Homes are, in fact, taking 55 per cent more time to sell; but to add some context, the average days-on-market has increased by only one week from 13 days to 20. Again, we have become accustomed to seeing homes sell in less than a week, but that was extremely unusual for Ottawa," Bennett says.
"In June 2019, on average it took over 35 days for a home to sell, and that was considered exceptionally quick at that time. Plus keep in mind, that there is a difference between the selling date and the closing date - many sellers are looking for closing dates in the 90-day range, so if a sale takes a few weeks longer they still have ample time for their desired closing date."
Myth: "I missed the best opportunity to sell. There are no more record-setting prices"
"Since the end of 2019, prices in the Ottawa market have increased by over 64 per cent (From $441,693 to $727,556)! That type of growth would normally take almost 10 years to achieve, but it took only 30 months," Bennett said.
"So, if you are still thinking of selling, while you may not set a record price for your neighbourhood, if you bought your home before 2019, your home has likely increased well beyond the value it would be if Ottawa had its typical increases.
"But it's important to keep in mind that setting a record price doesn't necessarily mean you made the most profit - even though you may sell for less than your neighbour, if you paid less and/or put less money into your home (renovations, updates, etc.) than it's likely your return-on-investment would be far greater than your neighbour."
Myth: "With mortgage rates on the rise, people will default on their mortgages"
"The rising interest rates have undoubtedly had an impact on the market. In fact, that was one of the major reasons why the mortgage interest rates were increased, to help stabilize the markets. But mortgage rates are roughly at the same level that they were in 2019 - again, the third best year on record. The most recent increase was announced last week at 100 basis points, or one per cent. While one per cent may seem like an insignificant number, that rise decreased buying power by 10 per cent! But these increases weren't announced overnight, many homeowners and buyers were able to lock in at the lower rates before they increased," Bennett said.
"More importantly, when approving a mortgage loan, banks use a qualifying rate - which is approximately two per cent higher than your actual mortgage rate. Being risk-averse, banks build in this 'buffer room' to protect against an increase in the mortgage rates - which is precisely what is happening now. Which means, this recent rate increase shouldn't impact current homeowners or any buyers who are working with a full-service brokerage and have locked in a guaranteed rate with a mortgage pre-approval. However, if you are a potential buyer shopping on your own and you simply used an online mortgage calculator to get pre-approved, it's unlikely you have a guaranteed rate and this recent increase will have an impact on your purchase."
CTVNews.ca Top Stories
DEVELOPING Live updates as Stormy Daniels testifies at Trump hush money trial
Adult film star Stormy Daniels will take the stand a second time Thursday as former U.S. president Donald Trump’s hush money case continues in Manhattan. Follow live updates here.
NEW From yearning for a change to cost of living, why some Canadians have left or may leave the country
For some immigrants, their dreams of permanently settling in Canada have taken an unexpected twist.
Here are the ultraprocessed foods you most need to avoid, according to a 30-year study
Studies have shown that ultraprocessed foods can have a detrimental impact on health. But 30 years of research show they don’t all have the same impact.
NEW Capital gains tax change 'shortsighted' and 'sows division' business groups tell Freeland
Forging ahead with increasing Canada's capital gains inclusion rate 'sows division,' and is a 'shortsighted' way to improve the deficit, business groups are warning Finance Minister Chrystia Freeland.
Ontario man frustrated after $3,500 paving job leaves driveway in shambles
An Ontario man considering having his driveway paved received a quote from a company for $7,000, but then, another paver in the neighbourhood knocked on his door and offered half that rate.
Defence attacks Stormy Daniels' credibility as she returns to the stand in Trump's hush money trial
Stormy Daniels will return to the witness stand Thursday in Donald Trump's hush money trial as the defence tries to undermine the credibility of the porn actor's salacious testimony about their alleged sexual encounter and the money she was paid to keep quiet.
With contactless screening tech, this Toronto startup hopes to catch breast cancer early — and save lives
Amid evidence of rising breast cancer rates among young women in Canada, one Toronto startup is offering a contactless and radiation-free device that can help doctors identify suspicious changes in breast tissue. The company, Linda Lifetech, says this can lead to earlier detection of breast cancer.
Tornadoes tear through southeastern U.S. as storms leave 3 dead
Forecasters warned a wave of dangerous storms in the U.S. could wash over parts of the South early Thursday, a day after severe weather with damaging tornadoes and large hail killed at least three people in the region.
Police handcuff man trying to enter Drake's Toronto mansion
Toronto police say a man was taken into custody outside Drake's Bridle Path mansion Wednesday afternoon after he tried to gain access to the residence.