Bidding frenzy: the sequel

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Agent Linda van den Broek says many homeowners list houses below their market value and that's what sparks bidding wars. (BORIS.MINKEVICH@FREEPRESS.MB.CA)

Those days of frantic bidding wars and hair-raising selling prices have returned to the local resale-homes market in a big way.

A near-record 1,373 homes sold last month through the WinnipegREALTORS Multiple Listing Service, and the association said at least 30 per cent of them sold for more than the listed price.

How much more? Winnipeg real estate agent Linda van den Broek, of RE/MAX Executives, cited one recent case where a house in River Heights sold for $52,000 more than the list price of $249,900.

But in most of the other cases, it's been up to $20,000 above list, she added.

While that's enough to make a buyer's blood run cold, Van den Broek said today's market conditions still aren't as crazy as they were in 2007 and early 2008, when up to 85 per cent of the properties were attracting multiple offers and desirable homes were routinely selling for $30,000 or $35,000 above the asking price.

And not all properties and all areas of the city are getting caught up in this latest frenzy, WinnipegREALTORS spokesman Peter Squire said.

"It's not as across the board as it was during those really frantic times..." Squire said. "You'll still find some homes where there aren't a lot of offers. So people still have to be realistic about what they're asking for (for their house)."

Van den Broek said the areas that seem to draw a lot of multiple offers include River Heights, Old St. Vital, Whyte Ridge and North Kildonan.

And Squire said the houses that are most likely to draw multiple offers are the ones in the price ranges where the bulk of the sales activity is taking place. Those are the ones between $100,000 and $300,000.

The return to a sellers' market began two months ago, when the WinnipegREALTORS recorded its third-busiest June on record for unit sales and its second-best June ever for dollar volume of sales.

"I've been in this business for 22 years and June was a banner month for me," Derrick Smyth, an agent with Royal LePage Prime Real Estate, said Thursday. And July was almost as good.

Smyth said while the increase in bidding wars has been positive for sellers, it's bad news for most buyers. He said one of his clients --Winnipegger Tannis Morissette -- has been trying to buy a home in St. James for the last three months and keeps getting outbid for properties.

The latest instance was earlier this week, when Morissette bid $190,000 for a house on Sackville Street that was listed for $179,000, and someone else bid $203,000 and got it.

"It's frustrating, to say the least," Morissette said. "There are not a lot of good homes out there and a lot of them have too much work that needs to be done for what they're asking for."

She said she also offered $228,000 for a house on Cora Avenue that was listed at $205,000. And it ended up selling for $245,000.

While she finds it maddening, Morissette said she refuses to pay more than she thinks a house is worth. So she'll just keep looking until she finds the right house at the right price.

Not all buyers who get caught up in a bidding war come away disappointed. Another one of Smyth's clients, who asked that his name not be published, paid $270,000 for a house in East St. Paul that was listed for $255,900, but said he was happy with the outcome.

That's because he listed his old house on Belmont Avenue for $79,900 and got $120,000 for it, he explained, "so for us everything worked out really well."

Van den Broek blamed the bidding wars and the crazy market conditions on homeowners and real estate agents who list properties for less than their true market value in hopes of sparking a bidding war and getting thousands more than the asking price.

"It makes the agent look good and it makes the houses look good, but it's frustrating for buyers and the agents whose clients lose out (in the bidding wars)," she added.

She maintains sellers and agents don't need to do that to get a fair price for a property.

"I had my best July in 18 years of selling real estate and most of the homes I sold were listed at market value and with most of them we got market value," she said.

"It's really up to us as (agents) to educate the public on how to properly market a home," she added.

"I still think a balanced market is the best market and our best interests are in having a more balanced market."

murray.mcneill@freepress.mb.ca

Housing stats

HERE is a breakdown of more Winnipeg Multiple Listing Service sales numbers for July

(Source: WinnipegREALTORS)

$150,000 to $199,999

the most active price range last month, with 24 per cent of all sales.

$200,000 to $249,999

the second-most active price range, with 22 per cent of sales.

30

the average number of days it took to sell a home in July of this year.

25

the average number of days it took to sell one in July of last year.

30

the percentage of homes that sold for above list price.

11

the percentage of homes that sold for the list price.

Republished from the Winnipeg Free Press print edition August 7, 2009 A3