New Year 2009 Ottawa New Home Pricing

There are several likely reactions by Ottawa home builders to declining sales since last October, and not all involve price reductions. For example, builders constructing expensive single homes closer to downtown who are confronted by a steep fall-off in demand as a consequence of their high prices, may drop them to maintain their revenues.

In one such case the builder's prices have dropped by more than $45,000 for one design and over $100,000 for another one. Another reaction is for some builders to increase their prices but make special promotional offers, as if in compensation.

One builder we know of has very wisely decided the best option in the circumstances is to make no pricing changes at all.

But that too has its downside - since, when a sales is lost it is lost forever! Another builder has put up signs announcing "Inventory Clearance!" But - no surprise - most builders continued to raise their prices as if nothing untoward has happened to the economy or in the marketplace.

Perhaps forecasts of prices falling by only about 3 percent in Ottawa has created a mood of complacency, or maybe this is caused by the prognostication of CMHC that total sales for the year would fall only to the total level achieved in 2005.

Whatever the reason, the majority of Ottawa's major home builders have already raised their prices again instead of lowering them as was anticipated. Nevertheless, prospective home buyers should consider that, just as a pre-emptive strike is the a most effective military strategy, so too may business enterprises benefit by using the same strategy in competitive economic times.

It may simply be that home builders have raised their prices in anticipation of having to lower them in the not too distant future, when a lull in sales demands it. The advantage in their case is that they can do so then, without infringing on their desired profit margins.

Thus far - during the peak of the housing boom and its higher prices - some builders decided to shrink the sizes of their more affordable homes to keep end prices down without interfering with their profit margins, and enlarging other homes to compensate for steeply rising prices.

Or they offered different size homes of the same design in different communities where prices varied. All of which shows that buying and selling has not changed all that much since the days of the Roman Agora - the marketplace where law decreed that merchants erect a sign outside their premises warning visitors that "The Buyer Should Beware!".

In other words, the onus is on home buyers to closely examine the value of their prospective purchase before they buy, and to make as many comparisons as possible with the designs of other builders. That is precisely why this website provides you with as much information as we can acquire on your behalf.

Meanwhile, prospective home buyers can either buy now, before the Ottawa housing market has adjusted to the economic downturn, or wait to see the impact on prices and interest rates over the next few months.