Fewer than 3,800 resale homes available in sellers' market, and prices on rise

By Vito Pilieci, The Ottawa Citizen October 5, 2009

OTTAWA — Homeowners in Ottawa are staying put, leaving real estate agents scrambling to find listings and creating one of the strongest seller's markets the nation's capital has seen in years.

According to Rick Snell, president of the Ottawa Real Estate Board, realtors in Ottawa have fewer than 3,800 resale homes available to sell. Although listings traditionally drop in the fall, realtors had more than 4,700 listings at this time a year ago.

Yet even with the limited supply, the board reported its best-ever September with 1,220 sales, topping the 1,208 sales of September 2008. That pushed the average resale price to $304,789, a 5.7-per-cent increase from a year earlier.

Geoff McGowan, a Re/Max agent in Ottawa's west end, is finding the market so constrained that he has sold off his last remaining houses and now has no listings of his own.

"It's not the first time in my career that I have been 'listless'," said McGowan. "Listing inventory is definitely down. But it's not like they have been expiring, we have sold them all. It's very much a strong market right now."

McGowan said he hopes to get two new listings this week.

Snell said the economic slowdown has caused many potential sellers to decide simply to ride out the slump. As a result, buyers who hope to tap into low interest rates must scramble for available homes.

"Buyers are facing multiple offers on homes. That is influencing the upward prices," he said. "Whatever inventory is coming on is selling."Agents are also dealing with intense competition from newcomers that help sellers market their home directly to eager buyers.

As of Monday, Grape Vine Home Marketing Consultants had more than 800 listings on its service and the Kijiji website carried more than 2,500.

The supply shortage is pushing builders to step up construction of new homes. The value of building permits in Ottawa jumped 8.1 per cent to $161.8 million in July, the most recent month for which statistics are available. That's up from the $149.6 million worth of building permits sought in June, according to Statistics Canada.

The increase supports a Canada Mortgage and Housing prediction in September that the pace of new home construction in Ottawa will take off in late 2009.

The resale market looked anemic in the first few months of 2009. At the end of March, 2,479 resale homes had been sold in Ottawa, an 8.7-per-cent drop from the first three months of 2008.

But September's record pace builds on a strong July and August for the real estate board.

As of September, condominiums were selling for an average $241,458, and other residential properties for an average $322,960, the board said.