Sotheby’s enters slowing but stable luxury real estate market

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The realty arm of well-known auction house Sotheby’s opened its first Ottawa office Wednesday with an eye to capturing a share of the city’s luxury property market, despite taking a less-than-exclusive approach in its listings.

Sotheby’s 1,200-square-foot ByWard Market office is headed by Ottawa native Jeremy Levitt, who spent the last six years selling real estate as the owner of Century 21 Tremblant.

Mr. Levitt said his target market in Ottawa is properties priced at $400,000 or above, or roughly the upper 40 per cent of the market.

Monthly figures provided by the Ottawa Real Estate Board show the city’s home resale market remains healthy. Prices continue to creep up and year-over-year sales are relatively constant.

While several sales representatives OBJ interviewed say high-end homes are sitting on the market longer than in past years, there’s some debate about the strength of the city’s luxury segment.

“Selling real estate above $750,000 is a challenge,” conceded Mr. Levitt.

“But Ottawa is a healthy market, so long as the property is priced correctly.”

Others are more pessimistic.

The market for homes worth more than $1 million “is slowing to a screeching halt,” said Angelo Toscano, a sales representative at Re/Max Metro-City Realty Ltd.

He said tighter borrowing rules requiring larger down payments and shorter amortization periods may predominantly affect entry-level homebuyers, but also have a domino effect on the market. With an increasing number of would-be purchasers sitting on the sidelines, existing homeowners are unable to sell at prices that would allow them to upgrade to larger and more expensive properties.

Local realtor Marilyn Wilson, who specializes in high-end properties, also said it is taking more time to sell homes. However, her figures show that the number of Ottawa houses selling for more than $1 million this year is likely to be higher than in 2012 (see sidebar below).

Ms. Wilson currently leads an affiliate of Christie’s International Real Estate - the realty arm of the art auction house - and said she controls more than one-quarter of the local market of properties priced at more than $1 million.

She added she’s unconcerned about Sotheby’s entering Ottawa.

“We dominate high-end sales,” she said in an interview.

“I’ve worked very hard to build up my business … Real estate is about loyalty, relationships and trust.”

Ms. Wilson also questioned where Sotheby would find agents with experience in Ottawa’s luxury market.

Mr. Levitt said he planned to start recruiting staff following the opening, but did not have a specific headcount target in mind.

“We’ll hire as many quality agents as we can bring on,” he said.

He called his sales pipeline “excellent” and said he currently has four listings.

SIDEBAR: Number of Ottawa properties sold for more than $1 million

2007: 46

2008: 50

2009: 47

2010: 60

2011: 84

2012: 45

2013 (YTD): 39