It’s a seller’s market as real estate booms

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This article was published 10/08/2020 (2191 days ago), so information in it may no longer be current.

It’s a good time to sell a house in Winnipeg.

The supply is relatively low, and the demand throughout the summer has been relatively high, so when a strong listing comes on the market, it garners significant attention. That can lead to multiple offers, and more often than usual, they are well above the list price.

In July, 31 per cent of all single-family homes sold in the city went for above the asking price, nearly double the proportion the market experienced during the same month in the last five years.

The sweet spot has been in the $250,000 to $300,000 range, where potential buyers intrigued by low mortgage rates tend to cluster.

“When you see houses selling for above list (price), it’s a good indicator you’ve had a number of offers,” said Peter Squire, the vice-president of external relations and market intelligence for Winnipeg Realtors.

That was the experience of agent Ryan Auxtero of RE/MAX Executives Realty. A single-family home on a quiet cove in the Maples was listed at $299,000. Eleven offers were made after 30 to 40 viewings. Auxtero’s clients had submitted an offer that was higher than list price but not high enough; it likely went for about $60,000 more than the asking price.

Another listing in Windsor Park, Auxtero said, would normally receive three or four offers to start. Instead, 30 came in, and it sold for roughly the same amount above the list price.

“I didn’t win that offer,” said Auxtero. “The thirst is clearly there (for buyers).”

In March, some realtors worried sales this year could be abysmal, due to economic instability, a lack of buyer and seller confidence, and even the safety problems of showing a home. Now, the year is shaping up to be an improvement in terms of sales over a historically strong 2019.

“I would say, between (the beginning of the pandemic) and now, it’s a complete 180,” Auxtero said. “We are definitely buying and selling in the new normal.”

The ratio of sales to active listings is extremely high, especially in certain areas of the city, says Squire. At the end of July, Valley Gardens had 13 sales versus two active listings for a ratio of 650 per cent; Crestview, with 16 sales and five listings, was 320 per cent. St. James was near the 300 per cent mark.

Across the country, a similar recovery is underway. Major cities including Toronto and Vancouver have experienced year-over-year jumps in recent months: Toronto region sales went up 30 per cent and sales prices rose 17 per cent, while Vancouver enjoyed a 22 per cent year-over-year sales increase and a 4.5 per cent price increase, the Globe and Mail reported.

Meanwhile, each market had a similar decrease in available stock: “Each market was approximately 15 per cent below July of last year, making it harder for buyers,” the Globe’s Rachel Younglai wrote recently.

Teranet and the National Bank of Canada’s latest house price index, which tracks the rate of change to the price of a single-family home in Canada, had an overall 0.7 per cent increase in June compared to May, the lowest June advance in 17 years. However, Winnipeg’s rate increase was 1.8 per cent, helping to drive the national index upward.

It’s difficult to estimate how long the current wave of demand will roll, but Squire says it’s clear the market has had a quick rebound from its springtime lag.

“We’re obviously catching up, and in some cases, we’re going to be ahead,” said Squire, referring to the upcoming report on July’s housing statistics.

Real estate agents are aware the current demand might not be sustainable.

Mel Boisvert of Century 21 Carrie Realty put a standard 1960s bungalow in Westwood on the market in June. It was in good condition, with a great location, Boisvert said, but the response was greater than he anticipated.

“It just hit at a sweet spot,” he said. “I think we had 52 showings in a week. It’s one of those stories that is sort of a good one for sellers, maybe not so much for buyers,” he said. Listed for $289,000, it sold for “substantially over” that price in early July.

The confluence of low rates on both mortgages and interest, low supply, and changing Canada Mortgage and Housing Corp. credit requirements that took effect July 1 created a perfect storm to lead to multiple offers and a relatively quick sale.

“A week earlier, and things may have been different,” Boisvert said. “The timing, like the location, is very important.”

ben.waldman@freepress.mb.ca