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Ottawa real estate in the age of COVID-19: Bidding wars still, but a reckoning is near

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By rights, Ottawa’s real estate industry should be flat on its back. It’s a sector that relies heavily on buyers with secure jobs, direct personal contact and confidence in the future.

Yet, despite all the pernicious effects of social distancing, including lost jobs, shrinking wages and disappearing revenues in core parts of the economy, the past week has been anything but quiet.

“In the last seven days, we’ve seen 576 new listings, 119 of them in the past 24 hours,” says Bill Meyer, owner of HomeTeamOttawa, a real estate firm that markets services under the Remax Hallmark Realty banner.  “We are still in this period of pent up demand.”

Indeed, the COVID-19 virus smacked into Ottawa’s real estate industry just as it was scaling rarely seen peaks. Residential resale prices had soared 20 per cent year over year in January and February, the highest such gains in nearly four decades. Residential properties last month sold for a record average $564,000, while condos fetched nearly $350,000.

Even so, momentum will carry the sector only so far. A reckoning is coming and there’s a whiff of desperation in the air.

“We aren’t doing open houses anymore,” Meyer says, “but this market is strong because some people still have to sell. They’re changing jobs or they’ve already bought a house and need to sell to pay for it.”

It could be a much different picture once all these urgent sales clear the market.  “This could all come to a screeching halt,” Meyers observes. “I can’t imagine people listing their homes in this (COVID-19) environment unless they have to.”

Certainly working conditions have changed. The firm’s 15 agents and staff are working out of their homes. Meyers goes to the office for a couple of hours each morning and evening, when he is the only one there, and catches up with colleagues by phone or email.

Like many other real estate firms, Meyer’s company has stringent protocols in place. Agents still arrange showings, but there can be no overlap of potential buyers. Hand sanitizers or wipes must be available, and all inside doors must be kept open so no one has to touch surfaces.

Meyer on Tuesday arranged an estate sale in which all papers were signed electronically.

It’s a similar scene at Paul Rushforth Real Estate, an agency with 13 realtors. “We’ve closed our offices, but our front desk is still taking queries from home,” Rushforth says. “We’re not doing open houses, and showings (of houses) are just one person at a time.”

Rushforth says he has been surprised by the briskness of sales activity this past week, but can see underlying weakness. As with Meyer, many of his company’s new listings are from people who absolutely need the cash after buying another house earlier and fully expecting to pay for it by selling their existing home into a hot market.

So far prices are holding up, but Rushforth notes some telling patterns. “We’re still seeing bidding wars for properties,” he says, “including more than half our ten most recent deals.” But he notes that a property that might have attracted 10 bids early in March now gets just two or three. This, in turn, means sellers are not getting as much over their initial asking price. “This week we listed a property for $699,000 and it sold for $708,000,” Rushforth explains, “Two weeks ago, it would have got $770,000.”

John King, the broker manager for Engel & Völkers Ottawa Central, says he also notices the start of a shift. On Thursday evening, he fielded six offers for a property at 480 Brennan Ave., in the Hampton Park district. It sold almost immediately for $747,000, more than $100,000 over the original listing price.

On Friday, though, he was somewhat surprised to discover there were still no requests for showings for two new listings in the highly popular district of Westboro. “It’s day by day now,” King says.

For the moment, Engel & Völkers is keeping its Ottawa offices open with a skeleton staff. “There’s just one employee per floor,” King says, adding he is also making greater use of video by doing tours of his listings through Facebook. If people like what they see virtually, they can sign up for a showing in person, “one group at a time.”

The difference between what was and what will be in Ottawa’s real estate market promises to be stark.

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Real Estate

A Pre-Approval Does Not Guarantee a Mortgage Approval

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You’ve gone through all the steps, jumped through all the hoops to start living your dream life in a new house. However, before you get too excited about your mortgage pre-approval, be warned that for Canadians, this doesn’t always guarantee a mortgage approval. Here’s how you can easily ensure that you get the property you desire.

Why is Mortgage Not Ensured from the Pre-Approval?

A pre-approval is still an important step to take to eventually lay the ground for a mortgage. It tells the seller of the house that you’re serious and ready to buy. While this step can be infinitely helpful in getting a mortgage, it’s not guaranteed.

The lender doesn’t yet know the property that you’re interested in. Depending on the cost of your future property, the pre-approval may not allow you to open a mortgage for houses above your means.

Pre-approval lets the seller know that your credit is worthy of buying a house, but will not necessarily qualify the buyer for every property out there.

How Can you Ensure you Obtain the House you Want?

Along with the assurance of a pre-approval, you can also take a few steps to ensure a future mortgage.

  1. Have a Great Credit Score. Credit scores show the lender how trustworthy you are with paying back a big purchase. In Canada, credit scores run from 300 to 900. A score of 660 or higher is ideal for getting approved for a mortgage. With a better credit score, you’ll be offered the lowest mortgage rates, which is great for your wallet.
  2. Supply a Larger Down Payment. In Canada, a down payment of less than 20% will require you to get mortgage default loan insurance. Bypass this step by saving up a larger down payment to go in with.
  3. Pay off Debt. A mortgage is not an easy weight to take on. Long-term debt in your name is created when you open up a mortgage. Make sure that your pre-existing debt is paid off before jumping into a new debt payment. This will also be more credible to the banks prospective.
  4. Test out Scenarios. Use a mortgage calculator to see what price range of houses are affordable with your current financial situation. A mortgage calculator will estimate the total monthly payment, including real estate taxes and homeowner’s insurance, that is required for purchasing a home. The calculator will save scenarios to pull up later in order to adjust the calculations to new situational changes. Comparisons of multiple circumstances or housing prices are easily obtained to clearly see what aspects of the purchase process are of importance. In addition, with this Canadian mortgage calculator, a schedule of payments can be printed to show how much the balance due is reduced each month.

What Was the Inspiration?

The perfect house is out there waiting for you to move into! However, be sure to do more than just getting a simple pre-approval. While this pre-approval is helpful in a home search, it’s by no means a guarantee to a mortgage. Keep all these tips in mind while searching for your new residence and stay realistic in what amount of debt you want to take on.

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Real Estate

This Ontario Manor Has More Rooms Than You Could Use & Costs Under $1 Million (PHOTOS)

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It turns out that some Ontario family homes are basically mini-mansions.

This Ontario house for sale comes with more rooms than you’ll ever probably need, and it will cost you less than a small Toronto home would.

The house is in Milverton, Ontario, which is a short drive away from Kitchener.

The listing was built in 1910 and has a ton of rooms, plus it sits on over an acre of land.

There are 12 rooms in all, but that doesn’t include the attic and fully renovated garage.

With that much space comes some pretty unique features, like this amazing vintage safe that’s hidden away in the house.

The house’s turret also lends itself to some unique interior room shapes as well.

There are five bedrooms, which will come in handy when you can have friends and family stay at your place again.

Outside of the house, the barn/garage comes with its own spacious interior.

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Real Estate

8 Of The Cheapest Homes You Can Get Around Ottawa (PHOTOS)

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Not all houses in the National Capital Region come with an enormous price tag. Luckily, there are still some affordable homes for sale around Ottawa if you’re on a tight budget.

The average price of a home in Ottawa is $591,413, according to Zoocasa. But if you’re willing to look outside of the city, you can find much cheaper options.

Here are eight incredible places to live that will make you eager to pack up your stuff and move, including one home with a pool.

Five-Bedroom Home

Price: $299,900

Address: 981 Dianne Ave., Rockland, ON

Description: If you crave a separate space for your home office, this five-bedroom home with a garage has tons of room.

Constance Lake Retreat

Price: $260,000

Address: 168 Constance Lake Rd., Ottawa, ON

Description: While living here, you can enjoy swimming in the pool and the picturesque lake view.

Two-Bedroom Duplex

Price: $259,900

Address: 138 Rue Archambault, Gatineau, QC

Description: This duplex has so much potential and is only a short drive from restaurants and stores.

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