You know how sometimes if you talk about something enough it will start to lose all meaning? It’s like the words give way to sounds that barely even register.
The real estate market in York Region remains hot in 2021, with prices and sales continuing to climb, and here are five newsmakers to reflect this year’s trend.
Imbalance between supply and demand
The latest data from the Toronto Regional Real Estate Board shows that home sales reached a record for the month of November and the average selling price also reached an all-time high. New listings were down substantially compared to last year for all market segments — further highlighting the inherent supply issue in the Greater Toronto Area, including York Region.
Number of sales in York Region reached 1,583 in November, which is up 36.1 per cent from the same time last year. Meanwhile the number of new listings was 1,796, a decrease of 11.6 per cent compared to 2020.
According to Re/Max’s housing market report, home sales are expected to rise and factors like decreasing inventory and new listings, increasing immigration and domestic demands will continue to exacerbate the imbalance between the supply and demand.
Bidding war is normal
Due to the substantial insufficiency of supply to demand, bully offers and bidding wars are commonplace in the current market.
“Homes sales this year often receive double-digit offers,” said Yinan Xia, broker and managing partner of Bay Street Group in Markham. “In some extreme cases, our team received up to 80 offers for a single property.”
Xia analyzed and pointed out that COVID-19 hit the hotel and retail industries hard, which investors used to be enthusiastic about. As a result, people turned their attention to residential housing, bringing together a wide variety of buyers and fierce competition.
People flock into remote areas
The pandemic has completely changed the way people work and live. “More transit options and hybrid work schedules have made relocation to the city’s outlying areas more attractive,” said Christopher Alexander, senior vice-president of Re/Max. The beneficiaries of the trend have been suburban communities, including the most northern part of York Region.
Statistics show that East Gwillimbury home sales jumped 145.3 per cent to 444 units in the first half of year of 2021, compared to 181-unit sales during the same period in 2020 while Georgina climbed 90.4 per cent, from 710 to 373.
Recreational property is the new favourite
Vacation properties are getting more valuable and popular, especially for families who work remotely and have children at home. Except for affordability, proximity to water or waterfront, space and comfort, amenities and good Wi-Fi remain the top buying criteria for people in the market for a recreational property.
For York Region, the rising heat of Wilcox lakeside homes in Richmond Hill is a good proof of this trend.
“Two cottages facing the lake, the price of a four-bedroom house in July 2020 was only 2.16 million; however, in September 2021, the one with only two bedrooms sold for two million,” Tommy Hua, salesperson from Real Land Realty Inc., illustrated by example.
Vacant homes tax considered in York Region
The region is considering vacant land tax to dampen speculative activities and help release more housing units, but Jason Mercer, chief market analyst of TRREB, doubts that will make a substantive difference as the most fundamental issue is the problem of supply and demand instead of speculation.
Re/Max looked at over 5,000 individual freehold transactions in the GTA between March 2019 and March 2021. Aurora was one of the six neighbourhoods that saw less than two per cent of sales repeated in that period — leading to the conclusion that speculators are not a significant factor driving the current market and rising prices.
TRREB president Kevin Crigger agreed with Mercer and insisted that governments at all levels must take coordinated action to increase supply. “Unless governments work together to cut red tape, streamline the approval processes, and incentivize mid-density housing, ongoing housing affordability challenges will escalate.”
Scarlett Liu is a federally funded Local Journalism Initiative Reporter at Economist & Sun
Who’s Minding the Store?
We’re seeing it more and more now at AgingParents.com: elders as landlords who can’t do the management job any longer. Sometimes it’s the adult children who bring the issue to our attention. They see Dad failing maintain those rental houses he has had for decades. If tenants complain, he does not do anything. They see Mom fail to collect rents from her commercial enterprise, a small shopping center. They realize that rentable spaces are vacant and have been for some time. No effort to lease them is underway. The kids are alarmed. It may be a single rental home, a commercial building, a vast portfolio or anything the elder owns. Cognitive decline was not anticipated. No one was paying attention and things go wrong.
Financially successful people often invest in real estate, but for those who manage the properties themselves, we see a lack of planning about how to ease out of the management role. The same problem can occur when a property owner has a long time management company which is not held accountable for its work due to the cognitive impairment of the owner. Again, no one is watching management. It is a perfect opportunity for theft from the owner.
Real Life Examples
In one case a wealthy man owned a rental apartment next to his house. The long time tenant took ruthless advantage of the 85 year old owner and simply stopped paying rent. He lived for free and manipulated the owner into thinking the tenant was giving him help in exchange for use of the apartment when no such exchange actually took place.
In another case the 87 year old owner of an office building with long-term tenants in it did not take steps to terminate a very problematic tenant who had been there for 20 years. The landlord hated her but failed to exercise his rights to simply not renew her lease. Instead he waited for her to give notice that she was going to vacate. He had another person interested in the space, willing to lease it but he seemed confused about what to do to secure that new lease. He managed the property by himself.
Both of those elders who were landlords had adult children who could have stepped up. In the first matter, the rental apartment, the elder resisted the son’s attempts to intervene. The elder did have dementia but functioned rather well in other things. He angrily fought his son’s attempts to take over his financial affairs. He had previously appointed his son to do this very thing. The freeloading tenant manipulated the elder into signing an agreement to give the tenant free rent for five years.
In the office building matter, the daughter of the 87 year old was clearly not close to her father and was not paying attention to his confusion. She may have been stopped from getting involved by her father, who was stubborn and unwilling to admit that he was having trouble with managing the investment. In both cases, the only way to prevent abuse and manipulation was for someone appointed earlier to step in and assume responsibility for property management. That works smoothly when the elder is cooperative. It creates a legal mess when the elder resists.
Cognitive Decline and Money Management
Research tells us that even in the earliest stages of dementia or other cognitive impairment, financial judgment is impaired. It is, in a way, the first ability to decline and it is hard to see at first. The older person with impairment for financial judgment can carry on a normal conversation, sound and look okay. But if you asked them about the bookkeeping or accounting, they likely can’t keep it straight. Decline is subtle at the beginning and gets worse over time. Something is amiss before any family member may notice it. Sometimes this leads to loss of value in the property as well as lost income.
What family members can do is to be aware that as a person ages, their sharpness for financial management of property (and other matters too) can slide downhill. If you are aware of aging parents’ real estate investments, it is helpful to educate yourself about them, and to offer to help “in case of any emergency”. Ask your aging parent to teach you about them, even if you know plenty already. This approach can appeal to one’s ego: asking for advice. Do this before you see any sign of a problem and you are likely to be successful in preventing loss of income and value of any real estate they own.
If you simply assume that if Mom or Dad has been managing the family real estate investments for decades and it’s all just fine, you are taking too much chance that it will stay fine. Aging takes its toll. Most of us need some sort of help as we age, especially as we reach 85. By that time, one in three people will have Alzheimer’s disease. If you don’t like those odds, make your best effort to get involved in the real estate they have before the investment loses its value for lack of attention. Fraud is all too common. Predatory real estate brokers, crooked management companies and dishonest tenants can take ruthless advantage of vulnerable elders. Don’t let it happen in your family. If you see your aging parent declining in ability to manage real estate and they fight you on stepping in, it is time to seek legal advice so you can learn what options you have.
Jacques Leclerc moved to Montreal from Detroit in 2019 with a simple plan.
He and his fiance Emily Ciccia planned to rent for a year and then buy a place with a 20 per cent down payment in Montreal.
It’s 2022, and the couple is still renting in Pierrefonds, frustrated, and starting to think a house purchase is not going to happen.
“Honestly, I never think we’ll be able to afford anything on the island, not at this rate,” said Leclerc.
The couple recently put in a bid over asking price on a house in St. Lazare, but they were outbid. It was a result they had already experienced a number of times on the island and were now having to deal with in the suburbs.
Leclerc is one among many potential home buyers seeing record increases in house prices influence where they can afford to purchase, if they can at all.
Royal LePage’s recent House Price Survey for the Greater Montreal Area showed almost a 20 per cent increase in the aggregate house price, which is now $532,600.
The median price for a single-family detached home also increased by 20 per cent and is $595,500, while a condo’s median price is $428,900 (up 18.2 per cent).
The company expects prices to continue to increase in 2022 due to a shortage of housing and continuing demand.
Royal LePage general manager Georges Gaucher said Montreal is seeing what Vancouver and Toronto have been witnessing for decades.
Montreal is about 40 per cent of Vancouver’s prices and 44 per cent of Toronto.
“We were historically behind,” said Gaucher.
Gaucher said with Quebec’s improved economy and job opportunities, investors entered the market ready to buy. The pandemic has added to the price increase causing buyers to go farther afield to find a place, a new trend.
“What we were not used to is going out really far away into the suburbs or cottage country to get a first house,” said Gaucher. “That is something that is unknown in Montreal.”
In addition, areas once considered less attractive – Hochelaga-Maisonneuve, East Montreal, Rosemont, North Montreal – are being looked at.
The situation is exactly what happened to Leclerc and Ciccia. The couple wanted to purchase on island, but are resigned to the fact that it might not be possible.
The house in St. Lazare the couple was outbid on needed a new roof, water heater and other repairs and they still could not meet the price someone else offered.
“What I want to know is who’s buying these houses way over asking price?” said Leclerc.
At the rate the market is going, the couple, who both have decent paying jobs with no children or other major financial obligations, feels they are in a race in which they can’t keep pace.
“Either like I need to be able to just borrow money I’ll never be able to pay back to buy this house or like I need a government subsidy to purchase this,” said Leclerc. “The cost of everything now, it’s like I’ll never be able to catch up at this rate.”
Gaucher said the conditions in 2022 are the same as in 2021.
“Where we have this explosion of buyers,” he said. “Jobs, interest rates, which brings consumer confidence, and then the flexibility of working from home. These were three major elements that created the market last year.”
In addition, Gaucher said the trend of empty nesters selling their houses and moving to a condo or seniors’ residence did not continue during the pandemic.
“People were scared of doing that, so that didn’t happen,” said Gaucher.
Even with the expected interest rate hike in 2022, real estate agents feel the market will remain a sellers’ market.
“There’s a lot of pent-up demand out there,” said Gaucher. “The problem we have is inventory, and we’ve known that for years and years.”
You know how sometimes if you talk about something enough it will start to lose all meaning? It’s like the words give way to sounds that barely even register.
The noise around Toronto’s housing shortage comes to mind. We have been screeching about our unbalanced real estate marketplace for so long that now that we’re truly in the thick of it, there’s not much left to say that could even begin to capture the truly untenable state of things.
And I am certainly guilty of this myself.
Since the pandemic kicked the real estate market into a gear never before seen, it’s been impossible not to comment as we have witnessed the ripple effects of low supply (hello, endless rounds of lockdowns) meeting high demand (hello, those endless lockdowns driving people to reconsider their living situations). The prices simply followed.
It was an incredible thing to witness, discovering that Toronto’s real estate market could barrel through a global pandemic, emerging unscathed, and, in fact, spread its fire in concentric circles around it. I was gobsmacked.
But two years in, rather than slowing down and stabilizing, that momentum has only increased.
For instance, as we closed the door on 2020, I remember writing about how incredible it was that across the entire Toronto Regional Real Estate Board there were all of 8,000 properties available on the open market for sale. At the time that number felt shockingly low. Whoa, I thought, that can’t be good.
Well, one year later, as we prepared to ring in 2022, would it surprise you to learn the available inventory had fallen by another 60%? We welcomed the new year with all of 3,323 properties for sale.
To describe that as chronically insufficient does not even begin to capture it.
But would you be surprised to also learn that 2021 was a record-breaking year for Toronto real estate? It was the most sales we have ever had in one year.
So, when we speak of an inventory crisis we aren’t saying that there are no properties to buy — though our active listings are way down year-over-year — we are mostly pointing to the fact that this market now moves so quickly that any available inventory is swallowed up almost immediately.
The structural aspects of our real estate market have become completely untethered from the market forces that used to drive it.
And yes, the confluence of events that got us here is complex and nuanced, but it should have been increasingly apparent to anyone willing to look for years now. With low interest rates and speculation driving demand, to decades of vastly insufficient housing starts thanks to bureaucratic red tape, restrictive zoning, and NIMBYism, the idea that things will simply self-correct from here seems like magical thinking.
This is a crisis. It’s time our leaders started treating it like one.
Back to school in 4 provinces as Omicron spreads – CTV News
Another COVID outbreak at BGH – Brantford Expositor
Omicron: 'Let it rip' not the solution, experts say – CTV News
HVAC scams and how to stop them; why can't retail workers get N95 masks? CBC's Marketplace Cheat Sheet – CBC News
China’s Economy Slowed Late Last Year on Real Estate Troubles – The New York Times
5 Year Old Game Also Named Wordle Rides The Wave, Donates Profits To Charity – TheGamer
UK government to cut funding for BBC – Mail on Sunday report
Roberta Bondar flew into space 30 years ago and never saw Earth the same after that – CBC.ca