Sellers' market in real estate leaves Sudbury buyers on emotional roller-coaster
Multiple offers drive up price, forcing buyers to make offers without conditions in bidding wars
First time home buyer Amanda Pride has been looking for a house in Sudbury since the fall, but says it's been an emotional roller-coaster since most homes up for sale are attracting multiple offers, which then drives up the price, out of her affordability range.
"You know you go and see something and you're really excited and you put in an offer and then rejection," she said.
Pride's offers have been rejected because there is a lot of competition from other interested buyers, and not enough listings.
The COVID-19 pandemic coupled with low interest rates has created a supply and demand problem in real estate.
It's a trend Christopher Zakher, senior analyst with the Canadian Mortgage and Housing Corporation, has been seeing across Ontario over the past year.
He says people aren't putting their homes up for sale because they don't want to move during a pandemic, and that results in fewer listings.
"At the onset of the pandemic, in the spring of 2020, we saw the number of new listings plunge; People weren't able to list their homes, they weren't comfortable to list their homes," Zakher said.
"When you're in these what's known as seller market conditions, which are conditions that favour sellers, prices do tend to go up," he said.
Stats from the Canadian Real Estate Association show that in 2020 there was 15 per cent price growth in Sudbury; while in February 2021, the price of homes was up year-over-year by 34 per cent.
In Sudbury the economy is fairly stable since the COVID-19 pandemic hasn't affected too many jobs for those in the mid to upper economic class, which is why more people are looking to buy a house.
"We're still definitely in a very one sided seller's market, that has been starting to slow down a little bit due to the increase in supply," says Tyler Peroni, chair of the Sudbury Real Estate Board, and a full time realtor.
"Basically we have 30 per cent more buyers than we did last year and we have 8 per cent less listings than we did," he said.
Peroni says it's not unusual to see 15 offers on one house, which then drives up the price.
The average price for a house in Sudbury as of March 2021 is about $370,000, compared to $273,000 in March 2020.
Multiple offers also adds another complication for potential buyers.
"With those offers, you'll see probably half of them that come in that don't have any conditions at all; So that means people aren't getting their home inspections done and their financing conditions," Peroni said.
The situation can be difficult for realtors like Peroni, who are trying to help people find the right home.
"When you are trying to set expectations with your buyer clients and you lose out on ten houses because there are multiple offers, that becomes just as draining as any other market out there."
Post-pandemic cool down?
Zakher believes the real estate madness will cool down once the pandemic and health restrictions start to lift.
"It's conceivable that once this is behind us, more people will be comfortable to put their home on the market, and especially those who have seen really strong price appreciation," he said.
In the meantime, Pride continues her search for their first home, and says she isn't discouraged yet.
"It's been a bit trying, but it's still a good experience...I'm still excited about it."
Pride does hope once an offer on a house has been accepted, that she won't have to compromise on what she's looking for.
"Hopefully sooner rather than later, I'll have my brand new home."
- An earlier version of the story incorrectly stated year-over year price growth stats for February 2021 at 20%. The figure is 34%. Those statistics are attributed to the Canadian Real Estate Association.Mar 23, 2021 9:54 AM ET
With files from Angela Gemmill