'Crazy' real estate bidding wars infect the suburbs
Frustrated Toronto and Vancouver buyers invade nearby regions, sparking bidding wars
After six months of searching and 18 failed offers, Kate Stoodley and her husband Neil have finally purchased their first home.
"Roller-coaster of emotion is what it was," she told CBC News.
Multiple offers are typical for buyers in Toronto and Vancouver. But the Stoodleys fought their housing battle near Whitby, Ont., a suburb about a 45-minute drive east of Toronto.
Roller-coaster of emotion.- Kate Stoodley, first-time homebuyer
It is a town where, according to the Toronto Real Estate Board, the average price of a detached home was $518,705 in April of last year.
Now it's $618,032 — an increase of more than 19 per cent in a year.
And over the entire 905 region of the Greater Toronto Area the price of a detached home has increased by even more.
- Real estate 'chaos' sends millennials scrambling before they're priced out
- This house sold for $111K in 1987, it might cost 10 times that now
- Canadian housing sets record for prices and sales in March
As she and her husband made one bid after another, Stoodley realized they had to spend a lot more.
That meant a budget increase to $450,000, and she still felt priced out of her hometown and the surrounding area.
"On one house we offered $105,000 over asking and didn't get the house. The house went for $130,000 over asking," she said.
Like many first-time homebuyers, the Stoodleys had a condition of pending finance approval, something they weren't comfortable removing even though in this market that one condition often meant the difference between getting a house and losing one.
But somehow on their 19th offer, after going $55,000 over asking and writing a heartfelt letter to the seller, they finally won, purchasing their first home in nearby Oshawa for $455,000.
"You gotta tug at the heartstrings a little," said Stoodley. She said she told the sellers, "We're first-time buyers trying to make smart decisions as we enter the difficult market and not to be discouraged by our condition of finance."
Please, please sell your house
Sarah Wollner, based in Ajax, Ont., who has been a real estate agent in the Greater Toronto Area for 10 years, says she's never seen a market like this in the suburbs.
"It's definitely crazy right now. Lots of multiple offers, pretty much everything is selling in competition and over asking, buyers are having to compete," said Wollner.
What's behind this housing frenzy in the 'burbs? Well, according to Wollner, buyers in Durham Region are competing with people from Toronto and the surrounding area who are looking for cheaper homes.
Add to that strict provincial land-use restrictions preventing urban sprawl and a lack of single-family homes for sale, leaving real estate agents with a growing number of frustrated buyers.
So Wollner now spends more of her time going door to door asking people if they're thinking of selling.
"What I'm trying to do is find a house that hasn't been listed yet for my clients. We can't just wait and sit around as realtors waiting for houses to be listed," she said.
For sellers it's 'awesome'
Debbie Oleskiw and her husband are clients of Wollner's. The couple is planning to retire at the end of the year and will be downsizing from a house to a condo.
"My agent gave me a call and said there are a ton of buyers out there. We were going to wait until the summer to put it on the market, but our agent suggested now would be the time," said Oleskiw.
So they listed their detached four-bedroom Ajax home in early April and within a week it sold for 106 per cent of list price.
"It was awesome. You know you are going to have multiple offers," said Oleskiw. "It was the price that made us decide who to give the house to."
Vancouver chain reaction
Soaring prices and bidding wars are also becoming commonplace outside Vancouver as buyers in search of affordable housing look east of the city.
- CMHC says many major housing markets showing signs of overvaluation
- Toronto, Vancouver housing markets continue record-setting pace
- New figures show massive growth in Metro Vancouver real estate prices
According to the Fraser Valley Real Estate Board, the average price of a detached home in that area has increased by 38.2 per cent from a year ago. The average price of a home has soared from $679,817 to $939,503 since April 2015.
"Of course if we had a crystal ball I would have gone back and bought as many houses as I could myself, right. I had no idea that we would see an increase this quickly," said Realtor David Corrie in an interview with CBC News.
He has been a real estate agent for 22 years in the Vancouver area and is based in Abbotsford, about an hour's drive east of Vancouver.
In the last few months, Corrie has noticed a trend of buyers from Vancouver selling their million-dollar homes and cashing out in the 'burbs. This creates a chain reaction of increased prices in a market with little inventory.
"I just had one house. It was priced at $450,000 and we had 17 offers and 12 of the offers came from people who live in Vancouver or Surrey. It sold for $610,000," he said.
Prepare yourself, this won't be easy
So what's the secret to finding a suburban home in this market? According to the experts, being prepared is key.
"If you see a house and you like it, you've already gone to the bank, your pre-approval is in writing, all that stuff is done. Because if you find a house you only have one chance," cautions Corrie.
You only have one chance.- David Corrie, Abbotsford, B.C., Realtor
And those conditions on offers that years ago you wouldn't even consider buying a house without? Well, they have become a thing of the past.
"Some of the things that these days would seem like a luxury, like a home inspection, oftentimes there's no time for that and in fact the reality of the situation is that houses are selling often without those conditions," said Wollner.