ADAM MILLS REALTY

How the Cooling Ottawa Market Will Benefit Homebuyers

Homebuyers, there’s finally some good news for you! The market is cooling, so you’ve got some leverage back to finally find your dream home.

While we’re not quite in a balanced market yet, there’s some optimism for homebuyers looking to enter the Ottawa market.

We’ve seen a decrease in sales over the last three months and an increase in interest rates which has given buyers a little more wiggle room than during the peak pandemic market; no more waiving inspections or battling it out in bidding wars.

Of course, soaring interest rates will ultimately decrease your budget, but that also means slowing sales, resulting in lower sales prices.

Another trend that’s occurring due to interest rate hikes is lower appraisal valuations. Home values are being appraised at price points significantly lower than asking prices, causing downward pressure on sales prices. If buyers can’t borrow funds because appraised property values are lower, sales prices will decrease, and, as a result, comparables in the area will also be valued lower.

While this isn’t the most beneficial outcome for buyers, it’s something. Yes, you will have to deal with the increased interest rates, which will ultimately decrease your buying power, but you’ve also regained some control in other ways.

We’re seeing a reintroduction of financing conditions & inspection clauses, two things that became obsolete during the pandemic. Buyers can now include provisions that allow them to secure financing after offering on a property, which helps them act a little faster when they find the right property. The reintroduction of inspection clauses is also a massive win for buyers, as we’ve seen many buyers who waived the inspection clause run into costly issues that could have been avoided.

While it may take some time, sellers will eventually adjust their expectations based on the market conditions. You may still find that some properties are priced higher, but ultimately sellers will realize that their expectations need to be lowered. 

The bottom line is that there’s a sliver of hope for buyers across Ontario. Take your time, make educated decisions and eventually reap the benefits.

If you’re looking for a home in the Greater Ottawa area, work with us! Our team has years of experience buying and selling real estate in Ottawa. With our extensive experience, market knowledge and research, we’ll be able to help you get into your dream home.