The Bank of Canada has opted to maintain its overnight lending rate at 5% for the fifth consecutive occasion, as announced in its scheduled interest rate declaration on March 6th. It affirmed its commitment to keep the policy rate steady at 5% and to continue the process of normalizing the Bank’s balance sheet.

Despite a drop in the annual inflation rate to 2.9% in January, the Bank cited underlying inflationary factors like shelter costs as grounds for maintaining the current interest rate level. It expressed the desire to witness further easing of inflation and the establishment of price stability before considering rate adjustments.

Economists anticipate potential rate reductions later in the year, possibly in the June announcement, should inflation continue to decrease toward the central bank’s target of 2%. The Bank of Canada's next announcement is scheduled for April 10th, 2024.

Today, the Bank maintained its target for the overnight rate at 5%, with the Bank Rate at 5¼% and the deposit rate at 5%, while also continuing its policy of quantitative tightening.

The global economic landscape saw a slowdown in growth in the fourth quarter, with the US experiencing a slight deceleration but maintaining robust and broad-based GDP growth. Meanwhile, the euro area's economic growth remained stagnant after a contraction in the third quarter. Inflation in both the US and the euro area continued to ease, while bond yields rose and corporate credit spreads narrowed. Equity markets showed strong gains, and global oil prices were slightly higher than previously projected.

In Canada, fourth-quarter GDP growth exceeded expectations, driven by exports, although overall economic growth remained below potential. Despite a modest increase in consumption, final domestic demand contracted, primarily due to a significant decline in business investment. Employment growth continued to lag behind population growth, and there were indications of easing wage pressures. Overall, the data suggest an economy operating with modest excess supply.

CPI inflation eased to 2.9% in January, mainly due to a moderation in goods price inflation. However, shelter price inflation remained elevated and remained the primary contributor to overall inflation. Underlying inflationary pressures persisted, with year-over-year and three-month measures of core inflation remaining in the 3% to 3.5% range. Although the proportion of CPI components growing above 3% declined, it remained above historical averages. The Bank anticipates inflation to stay close to 3% during the first half of the year before gradually easing.

The Governing Council's decision to maintain the policy rate at 5% and continue the normalization of the Bank’s balance sheet reflects concerns about inflation risks, particularly regarding the persistence of underlying inflation. The Council aims to witness further and sustained easing in core inflation while focusing on the balance between demand and supply in the economy, inflation expectations, wage growth, and corporate pricing behavior. The Bank remains steadfast in its commitment to restoring price stability for Canadians.

In February 2024, the Ottawa Real Estate Board reported a total of 886 homes sold through the MLS® System, marking a notable 15.2% increase compared to the same month in 2023. However, these sales figures fell 13.8% below the five-year average and 5.7% below the 10-year average for February.

OREB President Curtis Fillier emphasized the robust and active nature of the Ottawa real estate market despite higher prices and stable interest rates. Metrics across various indicators showed positive growth from the previous year, indicating significant activity among both buyers and sellers. Fillier, however, acknowledged the ongoing affordability challenges, with many individuals still unable to participate in the market.

The recent report from the Municipal Property Assessment Corporation (MPAC) revealed a scarcity of communities with homes under $500,000. A decade ago, 74% of Ontario residential properties had a value estimate below $500,000, but this has dwindled to only 19% today. Fillier advocated for impactful measures, such as allowing four residential units on property lots and eliminating exclusionary zoning, to address the lack of affordable housing.

Examining price trends, the MLS® Home Price Index (HPI) showcased a 2.8% increase in the overall composite benchmark price to $628,500 in February 2024 compared to the previous year. The benchmark prices for single-family homes, townhouses/row units, and apartments also exhibited varying gains. The average home price for February 2024 was $651,340, showing a 2% uptick from the same month in 2023. The dollar volume of all home sales surged by 17.5%, reaching $577 million in February 2024.

OREB cautioned against relying solely on the average sale price as an indicator of specific property value changes, emphasizing the variability across different neighbourhoods.

In terms of inventory and new listings, February 2024 witnessed a substantial 29.5% increase in new residential listings, totalling 1,539. Although these new listings were 10.3% above the five-year average, they remained 3.3% below the 10-year average for February. Active residential listings at the end of February 2024 numbered 2,158, marking a 16.3% gain from the same month in 2023. However, they were 59.6% above the five-year average and 17.7% below the 10-year average for February. The months of inventory stood at 2.4, remaining unchanged from February 2023, indicating the time it would take to sell current inventories at the existing rate of sales activity.

Navigating the real estate market often involves the crucial decision of whether to buy a new property before selling the current one or vice versa. This choice holds substantial financial and logistical implications and lacks a universal solution, depending heavily on individual circumstances, financial stability, and risk tolerance.

Opting to buy first and then sell has its advantages. It reduces stress, allowing for a more deliberate search for the right property without the urgency of finding immediate housing. This method facilitates a seamless transition, enabling individuals to move belongings at their own pace and eliminating the inconvenience of temporary housing or storage.

However, this approach comes with its challenges. Carrying two mortgages simultaneously can be financially burdensome, requiring preparedness to manage both payments if the current property doesn't sell quickly. Additionally, making contingent offers on a new home while the current one is still unsold may render the offer less appealing to sellers.

Conversely, choosing to sell first and then buy provides financial security by determining the exact amount available for the next property, reducing the financial risk associated with two mortgages. This strategy also offers a stronger negotiating position when making offers on new homes, as sellers are more likely to take seriously offers not contingent on selling the current property.

Yet, selling first has its drawbacks. It might necessitate finding temporary accommodations, such as renting or staying with family or friends, during the search for a new home, adding an element of inconvenience. Additionally, once a home is sold, there's time pressure to secure a new one, potentially leading to rushed decisions.

Seeking guidance from professionals like ourselves is crucial in making informed decisions about real estate transactions. Consulting with a real estate agent or financial advisor, such as Beth & Andrew, proves beneficial in these scenarios, as these experts can provide valuable insights to help individuals align their choices with their goals and financial capabilities. The absence of a one-size-fits-all answer emphasizes the importance of considering unique situations and priorities.

In conclusion, the nuanced decision of whether to buy or sell first in real estate requires careful consideration of personal circumstances. Whether individuals are leaning towards reduced stress and a seamless transition or prioritizing financial security and negotiation strength, contacting experts like the Beth & Andrew | Home Team to discuss their options is advisable. Weighing the pros and cons and seeking expert advice ensures decisions that align with unique goals and situations

In January 2024, the Ottawa Real Estate Board reported a total of 629 homes sold through the MLS® System, marking a 16.5% increase compared to January 2023. Despite this positive trend, home sales were 10.7% below the five-year average and 3.9% below the 10-year average for the month.

OREB President Curtis Fillier noted that while there is increased showing activity, the market remains relatively quiet compared to pre-pandemic standards. Buyers are cautiously approaching the market, taking advantage of the slower pace to find their ideal property. Fillier advised sellers to adjust their expectations and carefully consider pricing and timing strategies with guidance from their REALTOR®.

Brandon Reay, OREB’s policy and external relations manager, emphasized the impact of low supply on market conditions. He advocated for meaningful policy changes, including streamlining processes at the Ontario Land Tribunal, eliminating exclusionary zoning, and permitting four units on residential lots to address the housing crisis.

On the pricing front, the MLS® Home Price Index (HPI) showed a 3.2% year-over-year gain in the overall composite benchmark price, reaching $621,600 in January 2024. Single-family homes saw a 3.7% increase to $703,500, while townhouse/row unit prices decreased by 2.1% to $462,200. The benchmark apartment price rose by 3.7% to $418,500. The average price of homes sold in January 2024 was $631,722, a 1.8% increase from the previous year.

The dollar volume of home sales in January 2024 amounted to $397.3 million, representing an 18.6% increase compared to the same month in 2023. OREB cautioned that while the average sale price is useful for tracking trends, it may not accurately reflect specific property values, which vary across neighborhoods.

Regarding inventory and new listings, there was a 7.3% increase in new residential listings in January 2024, totaling 1,271. Active residential listings at the end of the month numbered 1,961, reflecting a 4.5% increase from January 2023. Despite being 57.4% above the five-year average, active listings were 16.6% below the 10-year average for January. The months of inventory decreased from 3.5 in January 2023 to 3.1 in January 2024, indicating a measure of the time it would take to sell existing inventories at the current sales rate.

Imagine scrolling through real estate listings and stumbling upon a dream home in a sought-after neighbourhood. Excitement builds, but there's a catch – the property is listed well above comparable sales in the area. Is it still worth considering? The answer may surprise you.

While a lofty price tag might initially raise eyebrows, there are various reasons why sellers choose to list their homes above market value. One possibility is that the property boasts unique and highly desirable features that justify a premium, such as a spacious backyard, a state-of-the-art kitchen, or a fully finished basement. In these cases, the extra cost might be justified by the added value these features bring to the table.

Another common reason for a high listing price is the seller's belief that aiming high will attract higher-priced offers. While this strategy doesn't always pan out, it highlights the subjective nature of home valuation. In such instances, the property is still worth a closer look, especially if it aligns with most or all of the criteria on your wish list.

The key lies in understanding why a home is priced the way it is. If additional features or amenities drive up the cost, and these align with your priorities, the premium might be justifiable. Perhaps the sprawling garden, the custom-designed kitchen, or the fully renovated bathroom are crucial elements that make the investment worthwhile for you.

On the flip side, what if the inflated price is artificial? If the seller has miscalculated the market or is overly optimistic, chances are the home will eventually sell close to its actual market value. In such cases, if you make an offer reflective of the real value, you might find yourself in a winning position.

The bottom line is that these seemingly overpriced listings are usually worth investigating further. It's essential to schedule that viewing appointment and delve deeper into the intricacies of the property. By doing so, you can assess whether the premium is justified by unique features or if it's a result of an optimistic seller.

Navigating high-priced listings requires a strategic approach. It's about evaluating the property beyond its price tag and understanding the nuances that contribute to its perceived value. So, if you come across a home that seems to break the bank, don't dismiss it outright – it might just be the home of your dreams, waiting to be uncovered.

Ready to explore homes that may surpass your expectations? Schedule those viewings with us, and let the journey to finding your dream home begin! Don't let a seemingly high price deter you; sometimes, the perfect home is just waiting for the right buyer to recognize its true value.

Let’s start your house hunting journey today!