A report recently released by the Canadian Real Estate Association (CREA) showed home sales were up 2.3% in February despite 7.9% fewer homes being listed on the market.

Jill Oudil, Chair of CREA was cautiously optimistic about these numbers. “February’s data contained the potential of a more robust market to come,” she said. She explained the CREA won’t have a full grasp on trends for this year until the busy spring season has arrived.

CREA’s Senior Economist Shaun Cathcart also saw reason to be hopeful about this year’s prospects. He said, “The similarities between 2023 and the recovery year of 2019 continued to emerge in February, with sales up, the market tightening, and month-over-month price declines getting smaller.”

Implications for First Time Buyers

The CREA report stated that on average homes continue to be priced roughly $135,000 less than at the same time last year (excluding Toronto and Vancouver).

For those who have room in their budgets for higher interest rates, and can pass the stress test, this may be a good time to opt in to the market.

But remember that the interest rates on mortgages are currently ranging from 4.6% to 6.2%.

It’s also important to take note of the dip in inventory. If there are fewer houses on the market going forward, buyers may face more competition for homes.

Implications for Current Home Owners

If you already own a home, this latest news from the CREA could mean good things ahead for you too. If the market is poised for recovery, it could mean that the value of your home will be on the rise again.

The lower inventory in February may mean there will be fewer homes on the market this year. If you are thinking of selling, this could put you at an advantage.

If you are also buying, know that competition for homes may be a bit stiffer again this year. Though we hopefully won’t see the crazy bidding wars of 2021.

Home Affordability in Ottawa

Although home prices in Ottawa aren’t as expensive as Toronto, Ottawa is still one of the top 5 most expensive cities for real estate in Canada. According to a Ratehub.ca report, home prices in Ottawa were down just over $72,000 on average in January.

The Ratehub report stated Ottawa’s average home price was $603,900 in January, 2023. This means a family would need an income of $122,440 to afford a home in this price range.

Although home prices are down, according to the report, this year’s higher interest rates had a negative impact on affordability. People in Ottawa need to earn $8,370 more than last year to afford a home in the average range.

It’s important to remember that these prices reflect the average sale price. If you are considering a smaller home like a condo, for example, you won’t need to earn as much.

The Takeaway

With the real estate market showing signs of recovery, this could be a good year for buyers and sellers. The market has cooled from its fevered pitch of 2021, and sales activity may be brisk but level-headed.

If you are thinking of buying a home, or need advice on managing your mortgage as you sell, please get in touch. We’d be happy to help.