Their own house, just down the street, wasn’t even on the market. No matter, their realtor said.
They’d already done some renovations, and realtor Caroline Harvey was confident their Kitchener home wouldn’t last long once it was listed.
The couple learned on a long weekend that the home they liked was coming to the market.
They viewed it on a Tuesday, and submitted an offer the next day. It was accepted on the Thursday; their conditions cleared on Friday.
“It was a little bit of a high-stress roller-coaster,” says Eric.
Facing competition from at least one other bidder, they offered a little bit over the asking price.
“We found out we weren’t the highest offer that was submitted, but they wanted to sell to us,” Eric says.
When they listed their own house, it sold in a week. And although only one offer was formally submitted, Eric says eight other prospective buyers were waiting in the wings.
“It’s such a high-stakes game and it’s emotionally tough on people,” he says.
While the dearth of residential listings is unusual, it’s not unheard of.
“We’ve certainly seen periods of low inventory before,” says Peter Benninger, president of Kitchener-based Coldwell Banker Peter Benninger Realty.
The one category locally that’s seeing a plentiful supply, even a surplus, is homes in the $1 million and higher range, he says.
While it’s impossible to say for sure why we’ve been experiencing an overall shortage of homes for sale of late, those in the industry suggest a few factors are at play.
For one thing, many people thinking of selling would also be entering the market as buyers, competing for already-scarce listings.
“Sellers are more afraid of being able to find the right replacement property,” says Benninger. Some people may choose to hold off altogether for now.
If a homeowner has purchased or refinanced and is locked in to a low-rate mortgage, that’s another disincentive to sell, says Zawada.
Low rates are also making it possible for both parties to own a home in the event of a separation or divorce, meaning there are fewer forced sales these days, suggested Benninger. That wasn’t necessarily the case in the past.
And at a recent luncheon for local realtors, Canada Mortgage and Housing Corp. analyst Erica McLerie said many baby boomers are working later in life and simply aren’t moving yet.
On the demand side, higher prices may be keeping some first-time buyers from entering the resale market. But others looking for a home locally are facing mounting competition from out-of-towners attracted by properties that are still far more affordable than in the Toronto area.
While the average sale price of a single-detached home in the areas served by the Kitchener-Waterloo Association of Realtors was $438,708 in May, it hit a staggering average of $1.3 million in Toronto.
According to the Canada Mortgage and Housing Corp., real estate sales and prices are expected to remain strong in Ontario in 2016, with price hikes forecast to slow next year.
The tight resale market is benefiting new home sales, where prices are rising, too, but not at the same pace.
If you’re willing to brave the market as a buyer, the Cambridge Association of Realtors’ Bite says it’s imperative to have your financing in order.
In a multiple offer situation, there can be pressure on a buyer to remove conditions. Rather than forgoing a home inspection once an offer is submitted, for example, a buyer could schedule a second showing and bring an inspector with them before placing an offer, Bite suggests.
And although some people might balk at hiring a realtor and paying a hefty commission, it’s a wise investment in a hot market, says Eric Jardin.
“Everything went so smoothly with Caroline (Harvey, their sales representative),” he says. “I wouldn’t begrudge her a penny.”
So how much longer will the high demand, low supply conditions last?
It’s difficult to say with any certainty, but many in the business believe that the strong spring market will extend into the traditionally quieter summer months before calming down.
“Some things are all happening at the same time that … are creating that perfect real estate storm,” Zawada says. “It will be interesting to see what the latter half of the year produces.”
Benninger, a 38-year industry veteran, is confident conditions will stabilize before long.
“The nice part about our market that’s so different than the Toronto market or the Vancouver market — in all the years I’ve been in this business, we’re really steady as she goes.”
