Chilled housing market banking on first time buyers

Real estate agents and home sellers hope that an increase in first time buyers will warm the current chill on the housing market in Ottawa.

The number of homes and condominiums sold in February is down nearly 10 per cent from February 2012 according to the Ottawa Real Estate Board.

Home prices have only dropped slightly by comparison — less than one per cent for residential-class properties.

Last year's changes to mortgage amortization  — the federal government reduced the period from 30 years to 25 — chilled the market, says the real estate board, as did the fear of government job cuts, which continue to loom.

This year, first-time home buyers could determine whether the city's housing market heats up or continues to cool down. While  February's sales numbers are down from a year ago, compared to January 2013, 315 more residential properties changed hands.

"If a first time buyer buys a home then that usually results in two or three more home sales," said real estate board president Tim Lee.

But first time home buyer Dante Scaffidi, who's lived with his parents for 10 years to save up, thinks that more inventory  compared to 2012 won't generate the same value as in real estate markets past, so he's not rushing into home ownership.

"I just worry that they're oversupplying the demand ... and the value won't increase to my expectations for eventual resale," he said. "So I'm just wary about that."

Real estate agent Krystal Hess says building equity in your own property is smarter than paying rent and if you're willing to have a roommate, it can help with paying down a mortgage.

"I know it's a big thing to do but if you get a two-bedroom you can rent it out and cover your costs," Hess said. "It's nothing to be scared about."

With more supply than demand, it's also possible for home buyers to get a better deal than they might have had when sales were more robust.

Martin Shampoux's house has been on the market for three months and he's running out of time to sell as his family moves into their new place on Monday.

So Shampoux's burying a figurine of St. Joseph in his yard — an old Catholic tradition thought to bring luck in real estate — and he's dropped his asking price, which could attract a first time buyer

"We just hope it brings us good fortune and that we sell our house," he said.