Ottawa Versus THE WORLD

A recent trip to New York City and a brief conversation with one of its residents, has inspired me to look a little a deeper into the world’s real estate markets.  Boy am I happy to be living in Ottawa.  The average cost per square foot in down town Ottawa is roughly $465.00, making a 550 sqft space approximately $255,750 with out parking.  Now let’s take a look at what that 550 sqft of space would cost you around the world.

So next time you out looking for a home and begin to think that the prices are little unreasonable for such a small space, take a deep breath and think back to this post.  For a complete list of all homes under $300,000 in Ottawa, please send me an email.  Thanks for reading.

Advertisements

If it feels good, do it!


The average buyer has about ten items on their wish list when they look for a home or condo:

1. Price
2. Location
3. Number of Bedrooms
4. Number of Bathrooms
5. Amenities
6. Views
7. Finishes
8. Layout
9. Style
10. And…..the X factor

Unless your budget is limitless, you will not find the “perfect” home.  While most buyers and agents focus on number one on the list as the starting point, it is usually number ten that seals the deal. Buying a home is largely an irrational act, and driven by an emotional connection to the property. So, to make the search easier, perhaps you should focus more on how you feel about the home and less about how it conforms to the other list of requirements.

Central Phase One and Phase Two Floor Plans

With the first phase of Central by Urban Capital nearing completion at the corner of Bank and Gladstone and the launch of phase three quickly approaching this fall,  I thought that I would post the remaining floor plans for phases one and two.  I feel that the Via Spiga floor plan in phase two is maybe the best buy in the city right now for its size and price point.  For more details on pricing and availability please send me an email to tyler@bennettpros.com

Phase One

            

      

Phase Two

            

            






Can’t We Just Arm Wrestle for the Difference?

        At some point during the negotiation process when buying or selling a home, the buyer and seller will get to a point where neither side wants to give an inch. Of course the seller doesn’t want to feel like they have left money on the table and the buyer doesn’t want to feel like they have over paid.  Money is money and for the majority of us $5000 is a lot of money, I know it is for me.  What I want to do is give you a quick example of how by “over paying” $5000 will really at the end of the day, have a negligible effect on your over all investment.       Scenario: A first time buyer is looking to purchase a brand new condo.  The unit is built but has never been lived in.  The seller purchased the unit through the  builder at the pre-construction stage and has now decided to sell.  The builder is selling their remaining units at $388.41/sqft (the average new construction condo will sell for $465/sqft), plus $30,000 for underground parking and a floor premium of $3000 minimum per floor.  There is a comparable unit on the third floor so we will add $6000 in floor premiums. The unit you are looking at is 834sqft, on  the fifth floor, with south and west views.  If we use those numbers to come to a price, we get:

834 (sqft) x 388.41 ($/sqft) = $323,939

$323,939 + $30,000 (parking) = $353,939

$353,939 + $6000 (floor premium) = $359,939

      So for argument sake, we will say that the market value of the condo is $359,939, which is almost unheard of for a condo like this. The seller originally had the condo listed at $374,900 and has dropped the price through negotiations to $365,000.  The buyer is only willing to pay $360,000.  For the seller to drop the price again by $5000 is a lot harder for the seller to do than it is for the buyer to come up.  The seller is literally giving up $5000 of profit immediately, while the buyer can pay that $5000 over 25-30 years.  Your monthly payment on $360,000 at 3% over 25 years will be $1618/month assuming 5% down.  A $365,000 mortgage at the same rate, amortization period and down payment, will cost you $1641/month, a difference of $23 a month.  I get that $23 is $23 but over the year, that unit will appreciate $21,600 if you use the Ottawa average rate of appreciation of 6% a year.  In one year you will pay an extra $276 for the unit if you paid the extra $5000, however your unit will be worth $21,600 more, giving you a yearly profit of $21,324.

       At the end of the day of course money is money, but you will make up that extra $5000 in the first three months of living there.  So are you really going to lose your perfect home for $5000?

Why Little Italy?

     Quickly emerging as one of Ottawa’s hottest neighbourhoods, Little Italy is seeing fantastic growth.  Since 2000, home values in Little Italy have increased 154%.  This neighbourhood has had significant improvements made to its infrastructure in that ten-year period with the addition of three high-rise business towers, the reconstruction of the sewage system and a face lift to the streets and store fronts.  With an abundance of trendy shops, yoga studios, restaurants and immediate access to public transportation, Little Italy is quickly becoming the place to live in Ottawa’s down core.  Closer to the Byward Market and Parliament Hill than Westboro, arguably Ottawa’s most desirable neighbourhood, Little Italy’s location allows for its residence to walk to both of these major attractions and that’s exactly what people want.  When I meet my clients, most want the same thing, the ability to walk down town, without having to live in the hustle and bustle.  They are also demanding high-end luxury finishes that are only offered in very few homes in the area.   Enter SOHO Champagne.

       I know I write a lot about the SOHO product, it’s because I think it’s the best in town. SOHO Champagne is one of a kind.  Located in Ottawa’s Little Italy, this condominium will offer hotel inspired design, amenities and living.  With 15,000 sqft of amenities, this place is a resort.  Need to relax?  Head to the gym, hot tub, pool, steam room, sauna, wine room or the state of the art 24 person theatre.  Going to be home late from a road trip and want some clean sheet?  Call the 24hrs concierge and he can make that happen.   If you have ever wanted to live in a five-star hotel, now is the chance.

     Apparently a lot people do want to live in a hotel.  The launch of SOHO Champagne was the most anticipated condo launch of 2011. On June 2, the owner, Bruce Greenberg, held a Friends and Family Night.  Invitees who were hand selected by the owner himself scooped up 25 units of their own, mostly two bedroom units.  June 4 was the launch to the public.  On this day, the prices of the units were reduced by 2%.  When the doors opened at 12:00pm, over 200 people were already waiting.  The first person arrived at 11:30pm the night before.  When the doors closed at 4:00pm, 230 reservations had been made for 150 units, and not one two bedroom remained, confirming the hype, that SOHO Champagne is going to be the address in 2014.  When complete, this project will only increase demand for this area, making now a great time to buy in.  Let’s take a look at what we can expect moving forward.

      Greg Blok, Senior Investment Specialist with the Bennett Real Estate Professionals, writes in his article, “A Case for Urbanization”, “The Ottawa housing market has increased in value by 7% per year since 2002.  This 9 year period is slightly higher than the 50 year annual average increase of 6.33%.  In the condo market, in 2002, a new condo was priced on average at $250/per square foot, meaning a 1,000 sqft condo was $250,000, whereas today new condos are priced at $460/sqft meaning a 1,000 sqft unit is $460,000.  That means the 9 year annual increase in condo price is 9.3%.

     That means that condos have really only outpaced the complete housing market by 2.3% annually.  This is not a very significant outpacing, in dollar terms, it means an extra $5750 per year.  That does not seem that significant, but considering the fact that most condos take 3 years to build, that is now a $17,250 increase, a much more significant figure. 

     If you were buying a condo today, based upon the pattern over the past 9 years, the condo you buy today at $460,000 would be worth $588,340 upon completion in 3 years.  That appreciate is quite impressive.”  For the full article click here.

       Let’s say that on the day of the SOHO Champagne launch, you secured a J model, a two bedroom unit, on the 12th floor .  I have selected this floor plan as an example because I believe that this particular unit will outperform the other two bedroom floor plan.  Its over 40ft of wall to wall/floor to ceiling windows will not only make this unit highly desirable in this building but city-wide.  You would have also secured the 2% discount mentioned above.  Your unit was held at $447,000 and if the unit is released it will be sold for $459,000. You would have made $12,000 in one day by purchasing this unit, not to mention the potential growth mentioned above. 

     Little Italy is a fantastic spot for Gen Y, the Baby Boomers and everybody in between.  With all of the new development happening over the next three to five years, expect property values to rise quickly.  For a complete list of all of the available real estate in Little Italy, feel free to give me a call or send me a quick email.

Another Happy Client

“We began our journey to home ownership with a basic idea of what we wanted to purchase; a centrally located condo.  We had a fairly tight budget of approximately 300k but felt optimistic. Tyler showed us a few units and we then became a little worried about finding something that best suited our needs but was also within budget.  After some discussion, we then realized that we did not have a clue what we wanted.  With patience, Tyler took us to visit a wide variety of homes; those centrally located that required some updates and some new homes in the suburbs.  Nothing really spoke out.  After all those visits and us giving our feedback, Tyler knew just the place for us. 

We visited the model and thought it was too good to be true.  We had to be sure and therefore actually returned to the model half a dozen times.  We were finally convinced it would be the perfect “starter” home for us.  It has the storage we need, the lifestyle of condo living without the fees and is centrally located.

Tyler was patient, flexible, respectful and his knowledge about the market trends, neighbourhoods was refreshing.  He made this somewhat overwhelming process easy and stress free.  We would definitely use Tyler again.”

Jeff Duffy and Vittoria De Caria

May in Review

Members of the Ottawa Real Estate Board sold 1,659 residential properties in May through the Board’s Multiple Listing Service® system compared with 1,686 in May 2010, a decrease of 1.6 per cent.

Of those sales, 369 were in the condominium property class, while 1,290 were in the residential property class. The condominium property class includes any property, regardless of style (i.e. detached, semi-detached, apartment, stacked etc.), which is registered as a condominium, as well as properties, which are co-operatives, life leases and timeshares. The residential property class includes all other residential properties.

According to the Canada Mortgage and Housing Corporation (CMHC) in their Spring 2011 Ottawa Housing Market Outlook, the Ottawa Census Metropolitan Area (CMA) transitioned from a seller’s market to a balanced market in 2010 and will remain in that territory in 2011. CMHC analysts define Ottawa’s resale housing market as balanced when between 35 and 55 per cent of the number of homes listed for sale (new listings) in a given month are sold.

“Sales numbers for May were virtually unchanged from 2010, but prices continued to rise at about the same rate as we have seen for the past few months, demonstrating solid demand for resale housing in our area,” said Board President Joanne Tibbles. “A balanced market offers no distinct advantage to either buyers or sellers, so I’d advise anyone thinking of buying or selling to work with a local REALTOR® to help them achieve their goals. There are different strategies for marketing a home or making an offer to purchase in a balanced market versus a buyer’s or seller’s market. An Ottawa REALTOR® can help make the process easier for consumers,” Tibbles added.

The average sale price of residential properties, including condominiums, sold in May in the Ottawa area was $352,347, an increase of 5.6 per cent over May 2010. The average sale price for a condominium-class property was $261,871, an increase of 6.4 per cent over May 2010. The average sale price of a residential-class property was $378,228, an increase of 6 per cent over May 2010. The Board cautions that average sale price information can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The average sale price is calculated based on the total dollar volume of all properties sold.