Would you be surprised to hear that the number of residential properties sold last month was 30% lower than December 2021?

The statistics for December’s real estate activity in Ottawa might make it appear as though it has been an unusually quiet month.

But the numbers are far less surprising when considered in the broader context.

December's Numbers

A total of 601 residential properties were sold through the Ottawa Real Estate Board in December 2022. And while that marks a 30% decrease from the previous December, it’s only 22% lower than the 5-year average (and, as we’ll discuss later, those have been some unprecedented years).

The average sale price for a residential-class property was $655,839, a 7$ year-over-year decrease. Condominiums, on the other hand, went up 9% to $434,973.

All of these numbers point to a more balanced market, something Ottawa hasn’t seen in some time. Currently, there is about 3.8 months worth of inventory on the market. Compared to last year’s inventory of less than one month, that is a big improvement.

Within Context

While it can be easy to label this a “quiet” December, we must remember that December is generally the quietest month for real estate activity. And, though the number of sales is still below the five year average, the last 2 years were significantly higher (at 862 and 1,002 properties sold, respectively). So, it was quiet, but that’s not out of the ordinary.

We would be remiss to ignore the fact that market activity shot up quite a bit during the pandemic and that 2022 started with a very active market. Activity was bound to slow, but the drastic drop was precipitated by the Bank of Canada raising interest rates throughout the fall.

It’s also important to remember that average sale prices have been going up in the Ottawa market due to high demand and low supply volume. The reason we saw a small decline in the average sale price for residential-class properties in December was that market supply levels have continued to go up. And, while some of this is due to buyers pulling back from their previously aggressive purchasing pace as interest rates rose, it’s also due to a continual supply of new listings.

The number of new listings for December 2022 was actually 17% higher than in 2021, in spite of reduced buyer activity. These two factors together have helped to balance out the market tremendously.

So, while it might be tempting to say December was a “quiet” month, we prefer to say that the market activity was simply “balanced.”