Ottawa Centre sank to 27.6% in September. Now what for the Glebe?

What I told you in July

In my July look at the Glebe I said the neighbourhood was three markets in one postal code, and that the soft one was condos. A buyer on a canal-side apartment had room to negotiate. A seller of a detached home had thin competition and a deep buyer pool. That was a claim about the spring and early summer. The September OREB package is the first real score on it, so here it is.

Three months of Ottawa Centre

OREB does not publish the Glebe on its own. The closest area it reports is Ottawa Centre, which covers the downtown core and the neighbourhoods around it. Its sales-to-new-listings ratio (SNLR) is the share of new listings that sold in the month. Here is the run:

July: SNLR 39.6%, 5.6 months of inventory. August: 81 sales, SNLR 38.2%, 7.0 months of inventory. September: SNLR 27.6%, 6.8 months of inventory.

From July to September the ratio fell 12.0 points (39.6 minus 27.6). In September alone it fell 10.6 points (38.2 minus 27.6). A common rule of thumb in Canadian market reporting is that under 40% leans toward buyers. Ottawa Centre was sitting right on that line in July and August. In September it went well under it.

The August numbers also let you back out the pipeline. 81 sales at a 38.2% ratio means about 212 new listings that month (81 divided by 0.382). 81 sales at 7.0 months of inventory means about 567 active listings (81 times 7.0). Those are my derivations from OREB's published figures, not OREB numbers. Redo them and check me.

Where 27.6% sits against the rest of the city

OREB's September citywide numbers by property type: single family SNLR 34.6% with 4.4 months of inventory, townhouse 39.2% with 4.0 months, apartment 27.0% with 7.3 months.

Ottawa Centre at 27.6% is 7.0 points below single family, 11.6 points below townhouses, and 0.6 points above apartments. At 6.8 months it carries 55% more inventory than single family (6.8 divided by 4.4 is 1.55). The area is trading like the condo market, which makes sense because it is mostly a condo market. The apartment segment citywide had sales down 24.8% from a year ago and a benchmark price down 6.1%, and I covered the broader gap between the price indexes in this post on why they disagree.

What this cannot tell you about the Glebe

Be careful here. The Glebe sold 109 homes in the trailing twelve months I cited in July. That is about 9 a month (109 divided by 12). Against 81 sales in Ottawa Centre in August, the Glebe is roughly 11% of the area, and a seasonal month moves that either way. The Ottawa Centre ratio is a number driven by downtown towers, not by First Avenue and Third Avenue.

So the September data does not say Glebe houses got weaker. It says the part of Ottawa Centre that is condos got a lot weaker, and that the Glebe's own condo buildings sit inside that. The detached half of my July claim cannot be tested from this release. I will not pretend it can.

Scoring the July advice

Condo buyers: the claim holds and is stronger. Citywide apartments are at 7.3 months of inventory, up from 5.3 a year ago. If you are buying a Glebe condo, the negotiating room is real. My post on condo appraisals explains why a lower price can still hit a lender wall, so ask about that before you write an offer.

Detached sellers: untested, not disproved. What to watch is your own street. Look at how many comparable houses are active, how long the recent sales took, and whether they sold at or under ask. The July post had a First Avenue house over ask and a Woodlawn Avenue house under. A softening condo market pulls on the rest of the neighbourhood slowly, through buyers who were choosing between a condo and a townhouse and now find the condo cheaper.

The Lansdowne build is a separate drag on the south end of the neighbourhood, and I wrote about its hours and timeline in the Lansdowne pricing post. A seller with a Bank Street or Holmwood condo has both problems at once.

What I would do

If you own a Glebe condo and plan to sell, price off the last 60 days of sales in your building, not the spring. List with a number that survives an appraisal. If you own a house, do not assume the condo trouble is yours, and do not assume it is not. Check your block.

If you are buying, this is the cooler end of the neighbourhood to be shopping in. You can browse current Glebe listings and sort by days on market to see what has been sitting.

I sell houses. I do not sell mortgages, and none of this is mortgage, legal or tax advice. Talk to a lender and a lawyer about your own situation.

What would prove me wrong

If October's Ottawa Centre SNLR comes back above 35%, September was a blip and I read too much into one month. If it stays under 30% for a second month, the condo softness is the story of the fall downtown. OREB publishes the October numbers in early November.

Want me to pull the last 60 days of sales for your building or your block? Call me at 613-262-6545 or email fil@613realtor.ca and I will send you the real comparables, not the area average.