Take a look at London-area real estate prices and you’d be hard-pressed to find evidence that Ontario continues to struggle with the economic fallout of a deadly pandemic.
The London-St. Thomas Association of Realtors (LSTAR) released numbers this week showing that $500,000 is now the average price for a London-area home.
Average sale prices for the region are up 22 per cent when compared to August 2019, with south London and St. Thomas seeing the biggest increases.
CBC News spoke to a handful of people in the real estate and home renovation business to get their take on why housing prices are staying strong in this COVID-battered economy.
Despite all the uncertainly, it’s clear people are valuing their homes differently now that they’re spending more time in them.
Here are some of the trends we found:
1. Spring’s ‘Wait and see mode’ is over
LSTAR president Blair Campbell said when the COVID-19 outbreak hit in spring, many with plans to buy or sell went into a holding pattern, opting to see how the pandemic would play out.
This slowed the number of transactions, but prices stayed steady.
As Ontario moved to reopen the economy and life moved a little closer to normal, buyer confidence has grown and this is reflected in the August numbers.
“Demand and supply were low then, but demand has shot up since and supply has remained low,” said Campbell. “That combination is pushing up prices.”
However, as we move into fall, that buyer confidence is changing but in a way that’s pushing prices up, not down.
Campbell said people are looking to get deals done now ahead of a possible second wave of COVID-19 which some experts say could come as the weather cools and flu season picks up.
“Rather wait until when they really wanted to buy, some buyers are acting quicker,” said Campbell.
2. The GTA influx is still a thing
For years, Toronto-area buyers moving to London have fuelled London’s firm market.
Cheaper prices are still luring them down Hwy. 401, but realtor Rafi Habibzadeh says the trend toward working from home is another factor. He’s hearing from clients who say their move to working from home may become permanent, which means they no longer have to live near downtown Toronto.
“I’m still getting a lot of clients looking to buy here from the GTA,” he said. “The prices there have skyrocketed and for them, we’re still very affordable.”
Campbell said London’s low COVID-19 case numbers could be another draw.
3. New urge to upsize
The pandemic is forcing many of us to use our homes in new ways: No longer just living spaces but also offices, rehearsal rooms and places where our kids connect with school.
With all these new uses, houses considered comfortable a year ago are now starting to feel crowded, pushing a need for many families to seek something with more space.
“I see a lot of clients wanting a bigger home, a home with a rec room, a finished basement. Working from home has required people to have more space,” said Habibzadeh.
4. Loving it, not listing it
This builds off of trend No. 3. Some people who can’t or won’t move are choosing to stay and upgrade homes where they’re suddenly spending much more time.
Jeff Beam of Unlimited Home Theatre has had a busy summer.
“Outdoor audio, outdoor TVs have been great this year,” he said. “A lot of people are putting in pools.”
The catch is that a lack of certain materials and a disrupted supply chain are holding up some renovations or making them more expensive. Beam has run into problems ordering certain audio components and contractors are dealing with a lumber shortage that has delayed some projects and pushed up the prices of others.
“There’s a big backlog of people that we are still waiting to get to,” said Beam.
Another trend some agents spoke of: A firm market for cottages, as traditional family vacations are now either impossible or a logistical headache.
5. Multiple offers, sales well over asking
With buyer demand undiminished by COVID-19 and housing inventory low, multiple offers and sale prices way above asking price are now a part of London’s real estate reality.
Habibzadeh recently represented a Toronto buyer interested in a London house listed at $530,000. His client offered $575,000 but then, facing multiple offers, sweetened it to $600,000.
“My client still didn’t get it. It sold for $625,000,” said Habibzadeh.
The winning bidder was also from the GTA. And while that’s good for sellers, it’s pricing out some local buyers.
“People who are from London are having a hard time buying here because sometimes there are multiple offers,” he said.
How the pandemic has changed Montreal real estate – Montreal Gazette
Selling your home in the middle of a pandemic may seem stressful, but the thought of going through a long winter lockdown in a home you’re unhappy in can feel unbearable. When you can go from long lunches on pop-up terrasses to living in lockdown in the space of a few days, it’s clear: there’s no time like now to do the things you dream of.
This sharpened sense of urgency is spurring many Montrealers to make big life changes. More and more, urbanites are trading chic city condos for country homes and springing for cozy chalets in cottage country, realtors say.
Others are taking advantage of low interest rates to finance upgrades to their homes, or buying bigger and more luxurious properties with more space to live, work and play.
Yet the number of homes on the market remains at a record low. The result is a dynamic market — almost manic, Engel & Völkers broker Patrice Groleau said.
“The market is just insane. We’re breaking records. We’re not sitting on any properties, we’re selling everything. If it is well-priced, we are selling it,” Groleau said. “People want to live now. People dream about having a chalet or to buy a new house. They say, ‘We don’t know what will be tomorrow’.”
Why pocket listings promote a discriminatory real estate market – Washington Post
Our response: Thank you for your insight. You bring up a good point about pocket listings: When real estate listing agents use pocket listings, they deny the general population the ability to view and bid on properties that should be on the market.
We’ve written about pocket listings and the NAR passing a rule that prohibits pocket listings several times this year. A pocket listing is when a homeowner hires a real estate agent to sell their home, but the listing does not show up in any multiple listing service or in any online listing of homes for sale. The listing agent effectively keeps the listing for themself (and their own customers) and markets the home privately to other agents who are often in the agent’s own office or to specific people before the world gets the right to view and bid on the home.
We believe pocket listings do a disservice to buyers and sellers. And the current overheated state of the residential market shows exactly why.
In a hot market, a pocket listing might enable a homeowner to unload their home quickly to a buyer that the listing agent already has or finds through word of mouth in the listing agent’s office. That sounds good, right? But such a quick “insider” sale might deprive the seller of a higher price that the seller might get by having all interested buyers in the marketplace know about the home and be able to tour it and bid on it.
What about using a pocket listing in a slow market? It’s a basic economics question: The more people who see the property, the higher the chance there will be more interest in it, allowing the homeowner to sell for more money. Indeed, the listing agent might test the waters and see what the market might bear with a higher sales price. If the market responds negatively to the higher price, the listing agent can lower the price of the home to the point where it becomes competitive.
No matter whether the market is fast, slow or (in the words of Goldilocks) “just right,” pocket listings do not give the homeowner the benefit of having every possible buyer see that the home is for sale. The homeowner only gets a narrow slice of the market, and that slice is determined by the listing broker.
Now we have heard arguments from listing brokers that say some homes are better off sold through pocket listings; in particular, high-end homes or homes of the rich and famous. Again, we disagree. Many agents of extremely high-end listings say that pocket listings at these price levels rarely work. We know of a top agent in Atlanta who advertises her listings (multiple-million-dollar listings, some of which listed at prices more than $10 million) globally. More often than not, she sells to an out-of-town buyer.
Your point is that pocket listings deprive the market as a whole of these listings and that listing brokers might intentionally or unintentionally market these homes in a way that deprives specific groups of buyers from even knowing about these properties, let alone making an offer. This is the essence of discrimination in housing, no matter the price point, which is illegal under the Fair Housing Act.
When we claim to have a marketplace for homes, we should make sure that it is a fair marketplace for all and that all home buyers and home sellers have an equal chance to buy and sell homes in the market. Thank you for your comment.
Canadian Real Estate Innovator, Properly, Announces $100M Financing from Silicon Valley Bank and i80 Group – Canada NewsWire
After witnessing the explosive growth of technology-driven innovation in the U.S. real estate market, the two leading firms behind the financing — Silicon Valley Bank, a bank focused on serving technology and life science companies and their investors, and i80 Group, a specialty finance firm that supports breakthrough fintech and proptech — are working with Properly to bring the same level of disruption to a Canadian market that has historically lacked innovation.
“We’ve seen technology-based real estate companies gain enormous market share in the U.S. by making the experience of buying and selling homes less stressful and more convenient,” said Nick Christian, Head of Specialty Finance at Silicon Valley Bank. “We see the same extraordinary opportunity in Canada, and we’re proud to support Properly as it works to revolutionize the real estate transaction.”
In the U.S., home buyers and sellers are flocking to companies that use technology to improve the purchase and sale experience. In 2019, six to seven percent of home sales in cities such as Phoenix and Raleigh were completed using a service similar to Properly’s, according to Redfin. The market share of these services have doubled nationally since 2018.
“It’s no secret that Canada’s real estate industry is ripe for innovation,” said Anshul Ruparell, co-founder and CEO, Properly. “This partnership will help us realize our vision of making home buying and selling data-driven, predictable, and stress-free. Now Properly can help even more Canadians buy their dream home as soon as it hits the market, even if they haven’t sold their current one.”
Traditionally, homeowners looking to purchase their next home faced a stressful dilemma: sell their old property first and risk moving twice, or buy first and risk holding two mortgages if the old property doesn’t sell in time. With Properly, home buyers will never miss out on a home they love because they haven’t sold their current one.
Properly lets homeowners secure the financing needed to purchase their next home so they can act quickly when they find a home they love. Once they’ve moved into their new home, Properly lists their old home on the market, so they can avoid living through showings and open houses, which is especially important during the pandemic. Customers can choose to work with one of Properly’s in-house real estate agents to help them navigate the purchase and sale process. Properly’s service costs the same as working with a traditional real estate agent; however, it comes with added financial benefits such as avoiding paying for two mortgages or incurring bridge loan costs. Within the first month of offering this new service, Properly was flooded with demand from thousands of Canadian homeowners.
“It was clear while getting to know the Properly team, the people and process would result in an unprecedented offering in the Canadian residential real estate market,” said Marc Helwani, Founder of i80 Group. “While we work with many innovative companies in the U.S., this is our first partnership with a Canadian firm. Properly’s results speak for themselves, and we’re excited to be a part of their success.”
Currently, Properly operates in the GTA and Ottawa, with plans to expand across Canada.
Properly is a Canadian real estate technology company transforming the home buying and selling experience with AI-powered home valuations and a modern, streamlined service. Properly launched in 2018 with the goal of empowering Canadians in their journey of homeownership. The company is headquartered in Toronto. To learn more about Properly, visit www.properly.ca
About Silicon Valley Bank
For more than 35 years, Silicon Valley Bank (SVB) has helped innovative companies and their investors move bold ideas forward, fast. SVB provides targeted financial services and expertise through its offices in innovation centers around the world. With commercial, international and private banking services, SVB helps address the unique needs of innovators. SVB works with leading Canadian companies including Shopify, Wave, Borrowell, and Properly. Learn more at www.svb.com/canada.
About i80 Group
i80 Group is a specialty finance firm providing capital and support to breakthrough fintech and proptech companies and other innovative platforms. We provide creative and flexible asset-based facilities used to fund origination of loans and other collateral. Rather than offering a one-size-fits-all structure, we design bespoke solutions specific to the unique needs of our partners. The company is headquartered in New York with offices in San Francisco.
Learn more at www.i80group.com.
For further information: Media Contact: Linda North, NorthPR Inc. (for Properly), [email protected], 416-708-8012; Eileen Nolan, Director, Corporate Communications, Silicon Valley Bank, [email protected], 650-248-3265
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