Kitchener, Waterloo real estate sales surge as bidding wars break out

Surging sales, tight housing inventories and an influx of buyers priced out of the GTA are fuelling a seller's market in Kitchener and Waterloo.

'Every house goes over the asking price, it's crazy' says one frustrated house hunter

Experts tell CBC News how to score the best mortgage possible to suit all your needs. (Colin Butler/CBC News)

It seems real estate bidding wars, the kind you normally read or hear about in big cities like Toronto and Vancouver, have landed in Kitchener-Waterloo. 

"By the time we actually started promoting it, it was sold within 48 hours," realtor Ian Taylor said of a three-bedroom, two-storey home he recently sold in Kitchener's Stanley Park neighbourhood. "It was multiple offers, over asking price with no conditions." 

Taylor, a veteran real estate agent with almost a decade of experience, insists the sale was no fluke. "Usually it's rare, but you know what? I sold two last week exact same thing: they were over asking price with no conditions."

Home sales broke an all-time record for the month of May in Kitchener-Waterloo with 752 sold homes last month and the first time May home sales have topped 700 in almost a decade. (Sean Kilpatrick/The Canadian Press)

Taylor is among an increasing number of local real estate agents who have noticed a distinct shift in Kitchener-Waterloo's real estate market: more buyers and agents are coming in from the GTA and they're bringing Toronto-style real estate tactics with them. 

Good place to invest

"I think people just realize KW is a good place to invest," Taylor said, noting the region's proximity to Toronto. The burgeoning tech sector and promise of more value for money relative to the pricier GTA, make it worthy of consideration by big city buyers. 

"The amount of phone calls we've been getting from the 416, 647 and 905 area codes has never been as strong as it is right now," he said. 

Taylor's take on the invasion of Toronto buyers certainly plays out in the numbers, which hit a new all-time high for the first five months of the year, according to the Kitchener-Waterloo Assocation of Realtors.

There have been 2,776 homes sold in the twin cities to date, the agency says, up almost 20 per cent above last year's total and 21 per cent above the five-year average. 

Sales are up, but inventory is tight

The agency announced that sales in May surpassed 700 for the first time in almost a decade with 752 homes sold this May alone, up nearly 20 per cent from same month last year and almost 30 per cent above the five-year average for the month. 

Not only have sales surged compared to last year, housing stock is far tighter, with the KWAR says there were more than 35 per cent fewer listings in May 2016, than at the same time last year. 

All of this adds up to an almost 10 per cent jump in the value of the average home in Kitchener Waterloo to $438,708.

"If you're a seller, this is a great time to sell," the KWAR announcement said. Buying, however, is a different story.

'Crazy' bidding wars

"Every house goes over the asking price," George Moldovan said. "It's crazy." 

Moldovan is approaching retirement and already owns his own home, but he's worried for his grown up daughter Bianca, who's looking to buy her first home.

He explained she learned the hard way just how hot Kitchener's real estate market is, when with a budget of $300,000, she had her sights set on a little bungalow in Chicopee Park area, but was quickly outbid by out-of-town buyers with bigger wallets. 

"They asked $291,000. We offered $291,000. It went for $310,525 and it needed to be gutted, $60,000 of just rough renovations, it's unbelievable," he said. "As is, no inspections, nothing." 

Real estate agents have been boasting on social media, such as facebook and twitter, about the bidding wars that have broken out this spring, leading many to go above asking price.

Still, Moldovan said his daughter is undaunted and will continue to hunt down her first home despite stiff competition from a sudden influx of out-of-town buyers. 

"It's good to have those people coming in, but it just raises prices," Moldovan said. "That's the main problem. Somebody asks $291,000, well give them $291,000." 

As prices rise, Moldovan points out, wages are not. He said the widening gap makes him worry not just about his daughter, but of an entire generation of young people who might delay putting down roots because they can't afford a home. 

What do you do with the youngsters starting at 16, 17 dollars an hour? How are they going to afford their first house? Because they're all looking for a $200,000 or $250,000 house. They don't exist anymore."