I’ve learned a ton about real estate statistics in the Ottawa Board in the past few weeks after I wrote a blog post in which I described July and August as slow months in real estate.
One of my colleagues at another brokerage took issue with that statement and provided me with board stats for the last three years that showed July and August as being quite busy. Soon after, the Ottawa Real Estate Board released statistics which indicated that July this year was busier than it has been in ages.
Now, I know that a lot of realtors in my office take holidays in August because it’s traditionally a slow period, so I was a bit skeptical about those numbers. I called the Board which said the stats are based on firm sales; I also spoke with one of the realtors in our office who used to be president of the Ottawa Real Estate Board and he double-checked for me because he thought the statistics included conditional sales as well.
It’s an important distinction. Conditional sales are entered into the moment you ink a deal that has any conditions in it, like a home inspection or financing. Knowing how many conditional sales were entered into during a given month would tell you how active the market actually was and how many people were out shopping.
But it turns out that the Ottawa Real Estate Board statistics are, in fact, based on firm sales. These are sales after all conditions have been removed. We say the deal has “gone firm.”
Now it can be several weeks before conditions are removed, particularly in condos, where a status certificate has to be ordered and reviewed by the buyer’s lawyer. It can take up to three weeks from when the deal was signed for the deal to go firm. A condition like the prior sale of a house can take months.
So — when you see statistics that report a busy month, those numbers will reflect quite a carry over from the previous month or months when the actual deals were entered into. A higher than average sale statistic in July this year no doubt reflects a good number of deals that were entered into a month or two earlier (during the spring market) rather than actual market activity in the month of July.
Why is this important? Well, if you’re trying to figure out the best time to put your house up for sale, you need to know that monthly statistics won’t answer that question. You’re much better off to discuss timing with your realtor. (And I remain of the view that while a well-presented, well-priced house will sell any time of year, the spring is still the busiest season for activity.)