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
Former homicide detective explains how police will investigate shooting outside Drake's Bridle Path mansion
Footage from dozens of security cameras in the area of Drake’s Bridle Path mansion could be the key to identifying the suspect responsible for shooting and seriously injuring a security guard outside the rapper’s sprawling home early Tuesday morning, a former Toronto homicide detective says.
MPs agree Canadian gov't should improve new disability benefit
The federal government needs to safeguard the incoming Canada Disability Benefit from clawbacks and do more to ensure it actually meets the stated aim of lifting people living with disabilities out of poverty, MPs from all parties agree.
Testifying in hush money trial, adult film actor Stormy Daniels describes first meeting Trump
Stormy Daniels took the witness stand Tuesday at Donald Trump's hush money trial, describing for jurors a sexual encounter the porn actor says she had in 2006 that resulted in her being paid off to keep silent during the presidential election 10 years later.
King Charles too busy to see son Prince Harry during U.K. trip
Prince Harry will not be seeing his father King Charles during his current visit to Britain as the monarch will be too busy, Harry's spokesperson said on Tuesday.
Boy Scouts of America changing name for first time in 114 years, aiming for inclusivity
The Boy Scouts of America is changing its name for the first time in its 114-year history and will become Scouting America. It's a significant shift as the organization emerges from bankruptcy following a flood of sexual abuse claims and seeks to focus on inclusion.
opinion Tom Mulcair: Turfing Poilievre from House a clear sign of desperation by Trudeau Liberals
When Speaker Greg Fergus tossed out Pierre Poilievre from the House last week, "those of us who have experience as parliamentarians simply couldn't believe our eyes," writes former NDP leader Tom Mulcair in his column for CTVNews.ca
Security guard shot, seriously injured outside of Drake's Toronto mansion
A security guard working at Drake’s Bridle Path mansion in Toronto was seriously injured in a shooting outside the residence early Tuesday morning, police said.
Katy Perry's mom was fooled by AI images of the singer at the Met Gala
Katy Perry did not attend the Met Gala on Monday, but some of the singer’s fans – and even her mom – thought she did.
Your body needs these three forms of movement every week
Movement is movement, right? Not exactly. Here’s what your body is looking for in addition to your morning walk or yoga session, according to experts.