The third time's the charm for Pam McKenzie. After countless open houses, offers on three different homes and many dingy basements, the 28-year-old bought her first house last month.
However, the journey to her dream home isn't over yet.
"There's work that needs to be done," she admitted, citing a lot of the renovations in the Berry Street house were amateurish and probably need to be redone.
Although McKenzie is overjoyed to be a new homeowner, the home-hunting process was a tough slog.
"Every time you get your hopes up, they're dashed," she said. "You keep trying, but you feel a little crushed."
First-time homebuyers are entering the market at a challenging time in Winnipeg. The average home price is way more than most first-timers can afford and the homes that are available are in need of major work.
"The price of housing has gone up exponentially, but the quality of that housing hasn't gone up," said Jino Distasio, director of the Institute of Urban Studies at the University of Winnipeg.
The average cost for a single-family home in Winnipeg is around $280,000, far beyond the $150,000-$250,000 most first-time house-hunters can afford. First-time homebuyers make up between 45 and 50 per cent of the market, meaning it's competitive house-hunting for what's out there.
"It is tough for first-time buyers given how the prices have increased over the last few years," said Peter Squire, market analyst for WinnipegRealtors.
First-time homeowners are putting more and more money into renovations to get the home they not only want, but also one that's solid and up to code, said Squire. Most of the affordable homes are older and may need rewiring, remodelling or have foundation issues.
"It adds to that burden of cost for that household, and incomes aren't keeping up with that," said Distasio.
The youngest home McKenzie looked at in her search was 90 years old, and even if they were renovated and seemed in good shape, appearances were many times deceiving, she said.
"They sound good, look good," she paused, "and then you get to the basement and there are a lot of structural and foundation issues."
She paid $159,900 for her two-bedroom, one-bath home and expects a lot of work ahead to remodel and repair the basement.
New homes are generally out of the question for first-time buyers. In south Winnipeg, expect a starting price of $312,000 at least, Squire said. There are condos being built in new developments, but with condo fees and other costs, the prices can be more than many can afford. New neighbourhoods aren't targeting the first-time home market anyway, but those looking for an upgrade from their current home, he added.
This is why McKenzie concentrated her search in the West End and Fort Rouge, two hot spots for first-time homebuyers, but neighbourhoods some consider less desirable when it comes to finding a family home.
However, while people grapple with getting into these more affordable neighbourhoods, prices rise, meaning less housing to go around. McKenzie is well-versed in vicious bidding wars.
She lost two houses because of the bidding wars, and not just because she bid too low. With the last house, she bid highest at $170,000, $5,000 over asking, but the person who got the house waived the home inspection, a trend that's been around for the last decade to make offers more desirable, real estate agents said.
It shows how desperate some people are to get into their first home, said Squire.
"For first-time buyers, it can really mean the difference if they can buy a home they're interested in," he said. "We just aren't in a balanced market right now."
Coming up: How first-time homebuyers are getting around the high prices, and a look at whether government programs and tax changes may ease the financial strain.
Mortgage affordability, 1982-2012
Housing prices have increased dramatically in Winnipeg over the last decade -- but interest rates have been very low compared. How do these factors affect mortgage affordability for first-time home buyers?
The graphic below demonstrates the effect of three factors -- income, interest rates, and housing prices -- on the relative affordability of mortgages for young adults.
Notes: The data assumes a house of average price was purchased by a median-income earner in the given year, with a 10 per cent down payment, amortized over 25 years with the typical fixed conventional 5-year mortgage interest rate charged by major chartered banks in January of the given year. Data sources: Bank of Canada, Statistics Canada.