Sold, sight unseen: N.B.'s sizzling real estate market shows no signs of cooling off
Buyers attracted by province's handling of pandemic, tight supply driving record sales numbers
Houses selling for over asking, getting multiple offers, selling sight-unseen. For New Brunswick's sizzling real estate market, it's all part of the new normal.
The Canadian Real Estate Association issued its October statistics on Monday, showing "historically strong" national home sales for the fourth straight month.
Even factoring in a "very quiet spring market" this year, the report said, it's the second-highest January-October on record for national sales, trailing only 2016.
"For anyone waiting for the Canadian existing home market to begin to settle down … they're going to have to wait a little longer," Canadian Real Estate Association senior economist Shaun Cathcart said. "At this point, activity in 2020 has a real shot at setting an annual record."
It's a trend that has been playing out in New Brunswick for months — accompanied by buying behaviours the province hasn't traditionally seen, the province's real estate association president says.
It's common now to have people buying houses sight unseen. Often, the first time they see it is on closing.- Andre Malenfant, New Brunswick Real Estate Association
"Every month we're seeing record sales numbers," New Brunswick Real Estate Association president Andre Malenfant said on Monday, noting homes are selling faster and for higher prices.
"Traditionally, we've been a balanced market, even a buyer's market," he said. "But now, we're definitely a seller's market."
Malenfant said a series of factors are driving the climb, chief among them New Brunswick's handling of the COVID-19 pandemic and "the law of supply and demand."
"We're continuing to see an increase in buyers coming from other provinces to get away from COVID," Malenfant said. "We've handled it pretty well and we have attracted attention" across Canada because of it.
Buyers are mainly coming here from Ontario, Quebec and British Columbia, Malenfant said. They're taking virtual tours of houses, offering over asking, sometimes even sparking bidding wars.
"It's common now to have people buying houses sight unseen," Malenfant said. "Often, the first time they see it is on closing. So they take possession, lock themselves in the house and quarantine for 14 days."
In some cases, he said, buyers will have a New Brunswick friend or relative come to tour the house before they buy it. But if that's not an option, the virtual tour can be "quite detailed, quite precise," with realtors zooming in closely on any facet of a home a potential buyer wants a closer look at.
A tighter-than-usual supply is also pushing prices up, with some people choosing not to list their home during the pandemic.
There are also greater numbers of retirees returning home to New Brunswick and retiring earlier than they'd planned because of the pandemic's chill on economies out west, Malenfant said.
Prices in each of the three biggest cities are up, with the Greater Moncton area leading the pack with a 15.1 per cent year-over-year increase in house prices, followed by Saint John with an increase of 12.3 per cent and Fredericton with a 5.3 per cent increase.
But the biggest jump is in northern New Brunswick, where Malenfant said prices are up 48.8 per cent over last year.
So how long can buyers and sellers expect this trend to go on?
"Real estate is cyclical," Malenfant said. "It will eventually slow down. Next year at this time we will likely see an increase in inventory, a lot of people putting their property up for sale. But I think it's going to stay strong for a while yet."
NEW BRUNSWICK HOME SALES STATS
- Average house price in 2020: $203,233
- Average house in 2019: $180,145
- Year-over-year increase: 12.8 per cent
- Average house price in 2020: $225,200
- Average house in 2019: $195,700
- Year-over-year increase: 15.1 per cent
- Average house price in 2020: $212,578
- Average house in 2019: $189,340
- Year-over-year increase: 12.3 per cent
- Average house price in 2020: $196,511
- Average house in 2019: $186,585
- Year-over-year increase: 5.3 per cent
Source: Canadian Real Estate Association (CREA)