The Ottawa area real estate market may have taken a hit during the May storm.

May is usually the peak month in this market, but May 2022 underperformed expectations.

With a total of 1,846 properties sold (1,384 residential-class properties and 462 condominiums), May saw an overall decrease of 19% year over year. And, contrary to normal spring patterns, the number of monthly sales puts May slightly below April for 2022.

Sales activity slowing down

The housing market in Ottawa has seen a subtle decline in sales activity for each month throughout the spring period.

In part, this is due to rising interest rates. The Bank of Canada has made several increases, and they’re not done just yet. This has buyers more hesitant as mortgage rates go up and qualifications tighten.

The last few months have also been a struggle for first-time home buyers due to a lack of entry-level properties as home prices have continued to rise gradually.

But an unexpected derecho passed through large areas of Ottawa and the Valley towards the end of the month, resulting in an evident decline in new listings. At the same time, “a corresponding increase in cancelled/suspended listings on the MLS® System” resulted in fewer listings in the period after the storm, according to OREB’s President, Penny Torontow.

While this certainly contributed to the drop in market activity, the market trends are undeniable.

The average number of days on market is now 14, an increase of 3 days from last May’s numbers.

We’ve noticed a little less competition in the market and a plateau (if not a slight drop) in listing prices as well as sale prices.

The average price of residential properties sold in May on the Ottawa Real Estate Board was $802,393. That’s an 8% increase from May 2021. However, that price is 3% lower than last month’s.

On the other hand, condominium properties sold in May averaged at $472,920, demonstrating 11% year-over-year growth. Condo prices seem to be holding steady at the moment, since they are the new entry-level property of choice. May’s average sale price is almost the same as April’s, with less than a $1000 difference.

Good news going forward?

Interestingly, although sales activity dropped, there were still enough new listings to raise inventory levels to over one month.

Patterns indicate that we may gradually be returning to a more balanced market (recently, there has been a general lack of inventory across the nation, making most markets quite unbalanced).

Sellers have no reason to panic as the scales are not tipping the other way. What this may mean for them is that the price increases will slow down and properties may take longer to sell. But we are nowhere close to being in a buyer’s market yet with low-supply issues still happening.