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
Which Canadian cities have the highest and lowest grocery prices?
Where you live plays a big factor in what you pay at the grocery store. And while it's no secret the same item may have a different price depending on the store, city or province, we wanted to see just how big the differences are, and why.
U.S. says Israel's use of U.S. arms likely violated international law, but evidence is incomplete
The Biden administration said Friday that Israel's use of U.S.-provided weapons in Gaza likely violated international humanitarian law but wartime conditions prevented U.S. officials from determining that for certain in specific airstrikes.
Swarm of 20,000 bees gather around woman’s car west of Toronto
A swarm of roughly 20,000 bees gathered around a woman’s car in the parking lot of Burlington Centre.
'State or state-sponsored actor' believed to be behind B.C. government hacks
The head of British Columbia’s civil service has revealed that a “state or state-sponsored actor” is behind multiple cyber-security incidents against provincial government networks.
Mother assaulted by stranger while breastfeeding baby in her car: Vancouver police
A person was arrested in East Vancouver Thursday after allegedly entering a car while a mother was breastfeeding her four-month-old boy.
More than half the Canadians once detained in Syrian camps for suspected ISIS family members have returned home
A total of 29 Canadians have been freed from detention camps in northeast Syria and brought back to Canada since human rights advocates began lobbying for their release years ago.
Rare severe solar storm Friday could bring spectacular aurora light show across Canada
A rare and severe solar storm is expected to bring spectacular displays of the northern lights, also known as aurora borealis, across much of Canada and parts of the United States on Friday night.
Canada abstains from Palestinian UN membership vote but supports two-state solution
Canada was one of 25 countries that abstained from a United Nations vote on Palestinian membership that passed with overwhelming support on Friday.
Amish youth experience a rite of passage called Rumspringa. It’s not what you might think
The idea of “Rumspringa” has a specific spot in the American imagination. A rite of passage for young people in some Amish communities, Rumspringa is seen by most outsiders as a wild time away from strict Amish rules, when teenagers can experiment with the modern vices of the world.