COVID and the housing market | GTAMotorcycle.com

COVID and the housing market

mimico_polak

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I'm not sure what's happening right now in the market, but you would assume (I know assuming bad) that in this type of economy, with a pandemic raging through, the market is going bananas! My friend has been looking for a house (semi/town/whatever) within the GTA for months and has been outbid on every property. One townhouse in Mississauga had 76 offers and went for about 180k over asking. Another house in Hamilton that he bid on...38 bids and 80k over. WTF! He ended up settling in Guelph for a 4 bed / 4 bath condo to use as an investment so he can buy in the GTA in the future while he rents to students (are schools even returning this year or next?).

What's happening. Are there so many more people with money than there are without a good financial backing?

A place a few blocks away from our house, 800k list price...sold for 1.25M! Total tear down! We saw them emptying the house right before it went on the market. Bin after bin after bin of junk/stuff.

Honestly I'm glad I'm not looking for a house, but I am curious what my house is worth with this insanity.

Buddies in construction are saying they've never been busier. Cottages are selling like hotcakes.

What is happening!?
 

moarmoto

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Yup. Been looking at detached around Burlington and Oakville.

So far we've seen probably 30 or so houses and put in 4 offers on houses we really liked. Looking around 1.3mil to 1.5mil range.

All been outbid, ranging from 100k to 250k. One house we were hoping to see sold over 300k asking.

It's pretty discouraging, and disgusting.

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GreyGhost

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I strongly dislike discussing over asking. It is such a loaded game that is easily manipulated. I know it's one of the simplest metrics, but I'd much prefer "over comparable recent sale" to give me some indication of what is happening. Even that doesn't always make sense though. Not that far from us a house went up for ~1.2 over any previous comp and imo probably ~800K over realistic market value. Sold in days with multiple offers at ~full asking price. Half the houses on the street quickly listed as they wanted to win the lottery too. They have been selling for ~800K less than the first one (as expected).

Two houses just went up for sale near my house. Both typical 50 year old bungalows on 10-14 acres for 650 and 850. I'm sure they are trying to drum up a bidding war. If you could get them for that price, it would be a rare jewel in the real estate swamp. Nothing special house wise, but having some land to call your own is never a bad thing.
 

Mad Mike

Well-known member
I strongly dislike discussing over asking. It is such a loaded game that is easily manipulated. I know it's one of the simplest metrics, but I'd much prefer "over comparable recent sale" to give me some indication of what is happening. Even that doesn't always make sense though. Not that far from us a house went up for ~1.2 over any previous comp and imo probably ~800K over realistic market value. Sold in days with multiple offers at ~full asking price. Half the houses on the street quickly listed as they wanted to win the lottery too. They have been selling for ~800K less than the first one (as expected).

Two houses just went up for sale near my house. Both typical 50 year old bungalows on 10-14 acres for 650 and 850. I'm sure they are trying to drum up a bidding war. If you could get them for that price, it would be a rare jewel in the real estate swamp. Nothing special house wise, but having some land to call your own is never a bad thing.
Personally I think realtors should have the same restrictions as car dealers. This seems to be the norm these days, place a below market price, announce a bid date that gets a bunch of anxious buyers then sell. Realtors do no work - they just create a mini circus then pull in a pile of clowns. My neighbour had 30+ offers the winner and several other bidders had not visited the house.

I had a couple of neighbors sell for well over asking this week, realtors typically leave their sign up with 'Sold over Asking' plastered on the front, the market is so hot some local agents don't have enough signs to leave on sold properties.
 

moarmoto

Well-known member
There should really be open bidding at least.

One sellers agent contacted us saying I need to increase my offer (also without conditions) before actually presenting to sellers. But how the **** am I supposed to know what price will actually get me the house without increasing significantly and overpaying?



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mimico_polak

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There should really be open bidding at least.

One sellers agent contacted us saying I need to increase my offer (also without conditions) before actually presenting to sellers. But how the **** am I supposed to know what price will actually get me the house without increasing significantly and overpaying?



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Australia does this as far as I remember reading about it.
And you are correct:
Selling agent: offer needs to be higher to compete.
Buyer: how much higher
Seller: can’t tel you
Buyer: how many offers
Seller: a few
Buyer: I’ll hold the price
Seller: click

with the rare instance of:
Seller: congrats the owners liked you the best for reason XYZ. House is yours.
 

sburns

Well-known member
I hate this whole conversation. The realty model in Toronto/GTA/Ontario whatev needs to be thrown out. @moarmoto example is exactly what is wrong, and more. What do the agents do besides some leg work, most of which you probably do yourself. Then suddenly they are the ones who speak on your behave when it comes time to make the deal??? How is this legit?

I was down in Florida a number of years ago looking at properties and they have a different way of doing things. You mostly deal with lawyers get your paperwork in order then you are ready to make the deal, something like that.

The other problem with our market might be foreign investors and low interest rates. I don't know enough to comment but I have head the Auz and New Zealand have put things in place to protect domestic buyers. But there are other issues which crop up.

Either way there is a squeeze going on and people are being burdened with outrageous pricing which seems to far exceed income.
 

mimico_polak

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When we sold our investment property the agent worked her ass off and deserved every penny.

when we sold our townhouse....just a lawyer as it was with people we knew.

when we bought our house, agent literally did nothing. I found the house, I met the owner, did the walk through with the owner without our agents, and our agent signed the documents and forwarded it to their agent. Both agents did NOT earn their commission in that deal. I was upset that she made 2.5% off that but in the end I’m an idiot and didn’t negotiate a cash back. Never again. At least I got some whiskey as a gift.
 

SunnY S

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I think its great. Its a free market. People pay what they are willing for a product or service. In this case, houses.

don't like it? don't bid. sick of cry babys crying foul.

welcome to market forces.... (if you play in the stock market, you know all about it)

(as for the insane commissions your typical agent makes for the amount of work they put in, well, that's a topic for another thread)
 

mimico_polak

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I think its great. Its a free market. People pay what they are willing for a product or service. In this case, houses.

don't like it? don't bid. sick of cry babys crying foul.

welcome to market forces.... (if you play in the stock market, you know all about it)
I sure won’t be bitching when it comes time to sell, when I’m buying though....greedy bastards! LoL
 

SunnY S

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I sure won’t be bitching when it comes time to sell, when I’m buying though....greedy bastards! LoL

it appears the prices are going to go even higher this year. Because the market is Hot, some nice properties are coming on the market as people capitalize which is great. Better to jump sooner than later IMHO. My RE lawyer told me regarding todays market, you might think you are overpaying, but 6 months from now, its going to look like a bargain....
 

Boots

Well-known member
I'll be in the market to buy my first home by the end of the year. The way it looks now, i'll probably have to settle for a condo - everything is just unreasonable. When I was looking even 5 months ago, houses in KW were going for around $450,000 for a decent starter house. Now it's north of $550,000.

Condo it is, i guess.
 

mimico_polak

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I'll be in the market to buy my first home by the end of the year. The way it looks now, i'll probably have to settle for a condo - everything is just unreasonable. When I was looking even 5 months ago, houses in KW were going for around $450,000 for a decent starter house. Now it's north of $550,000.

Condo it is, i guess.
Yup. Buddy had a budget of 800k for a semi/town/detached from Mississauga to Hamilton. couldn’t get it, bought a condo in Guelph to build equity and buy in the GTA in 5 years.

I should buy one too and just rent to students.
 

GreyGhost

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I sure won’t be bitching when it comes time to sell, when I’m buying though....greedy bastards! LoL
I think the model is broken on a number of fronts. As an easy first step, real estate agents being paid a percentage is an absolutely horrendous model. RE prices have been vastly exceeding inflation which means RE agent (or at least brokerage) income has been vastly exceeding inflation. The effort required to buy or sell a property is almost uncorrelated with price. Agents should bid on listings (eg. you are selling a beautiful TO townhouse for a fair price, I'll do that for 5,000 as it should take me less than two days of work or you are selling a dump in a non-desirable arera and want a fortune so I need 40K to deal with the hassle). The price you pay the agent should be based on the effort required on their part.

As far as foreign buyers tax or whatever, government missed that ship, no real point trying to catch it now. House prices are detached from income. Those that own are the haves and those that rent are the have nots. I don't see a way to correct that. Even if you blocked all foreign purchases (which I think is a bad idea), prices would not drop, they would just not climb as quickly.

Properly enforcing short-term rental by-laws has the potential to make a big positive change to the rental market but will put downward pressure on condos.
 

sburns

Well-known member
I think its great. Its a free market. People pay what they are willing for a product or service. In this case, houses.

don't like it? don't bid. sick of cry babys crying foul.

welcome to market forces.... (if you play in the stock market, you know all about it)

(as for the insane commissions your typical agent makes for the amount of work they put in, well, that's a topic for another thread)
You sound like the one crying foul, do I have it wrong? Manipulation serves no purpose other then skewing the market in your favour.
 

GreyGhost

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Yup. Buddy had a budget of 800k for a semi/town/detached from Mississauga to Hamilton. couldn’t get it, bought a condo in Guelph to build equity and buy in the GTA in 5 years.

I should buy one too and just rent to students.
I don't know if that works. It might, but I doubt it. In general, the closer you are to Yonge and Bloor, the faster the price climbs. Sure it is cheaper to buy further away but the guelph house will go from 800K to 1M while the Mississauga house will go from 1M to 1.4M. He built equity but needs to come up with another 200K of capital to get back to the same position. Buying the guelph house as an equity sink for retirement makes more sense than trying to use it to climb the property ladder closer to TO.
 

Boots

Well-known member
Yup. Buddy had a budget of 800k for a semi/town/detached from Mississauga to Hamilton. couldn’t get it, bought a condo in Guelph to build equity and buy in the GTA in 5 years.

I should buy one too and just rent to students.
I think that's the goal I have to settle with too unfortunately. I don't really mind, I'm a single person so theoretically a condo makes the most sense. What gets me is the maintenance fees and the possibility for special assessments. But I think every property just has it's pros and cons.
 

mimico_polak

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My friends started a site called Feeduck that actually had agents bidding down their commissions, for both buying and selling.

They were doing great last I heard but haven’t seen them in over a year with COVID so lost touch and don’t ask usually how business is going.

EDIT: Home owners

I always wanted my realtor license but impossible to be one with a full time job.
 

SunnY S

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I think the model is broken on a number of fronts. As an easy first step, real estate agents being paid a percentage is an absolutely horrendous model.

100% agreed. thats why I love agencies like www.purplebricks.ca that disrupt the old crappy model.

I've bought and sold several properties over the years without agents. All you need is a lawyer.

For the shy ones, Purple Bricks is perfect as they do all the heavy lifting for a cheap price.


Agents are a joke. (no offense to anyone on this board, I know you need to make a living) but at the end of the day, its a free market.
 

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