Even in the Wild West, people like Billy the Kid operated under a set of rules. When walking into a duel, it was understood that both men drew their guns at the same time.
Real estate in Oshawa is currently going through a “Wild West” period with few rules or common ways of doing business going as sideways as our prices. Let’s start with prices and how a low inventory market creates mayhem with values.
Oshawa detached homes: Year-end/2020 – $724,000 End January/2021 – $830,000 + $106,000
Semi-detached homes: Year-end/2020 – $597,000 End January/2021 – $649,000 + $52,000
My financial planner conservatively banks on a 5 per cent yearly return. On average, if you are an Oshawa homeowner, your home increased (tax free) $3,500 each day in January. I am guessing this beats her expectations. I have covered the reasons over the past few months why the real estate market is behaving in this manner, an exodus of buyers from Toronto along with low rates and a fewer number of homes for sale than we have seen in years. A perfect storm.
If you are lucky to be a seller in this market, you have options of how to plan a strategy to get your home sold for top value. In some cases, homes are listed hundreds of thousands of dollars below what would be considered market value, only to be bid up to a higher amount. The results of marketing in this manner is that many buyers who feel they can potentially purchase the home are left on the sidelines. I know of several homes that have had over 100 buyer showings and received over 20 offers. I will leave it up to home-sellers to discuss the effectiveness of this approach with the agent they choose to work with. Several things happen when this much activity occurs at a home: the homeowner needs to be away from the home for large blocks of time, (which is challenging in lockdown) and buyers are frustrated in having 15 or 30 minute viewing times to look over a property they may want to purchase.
When working with buyers, I find a good approach is to help them to understand that by being pre-qualified, it helps to set guidelines of exactly what they can afford. The next step is to help educate the buyer on what homes are selling for. It is a bit backwards, however understanding what homes are worth in today’s market is more important than what homes are being listed for. Once the buyer understands the approximate value of a home, they know what to offer. The offer price is based on what a realistic market value is, which in many cases has nothing to do with the asking price.
This way when a buyer who is looking for a semi-detached home in Oshawa listed for $480,000 understands that the average semi is selling in the mid $600,000 range, they have a better chance of securing the home. In the past seven days the largest asking-price to sale-price difference was $302,000.
A recent example of this would be with semi’s selling in the Oshawa Civic area. Four semi-detached homes sold in two days last month. Two sold at $660,000, one sold at $661,000 and one at $631,000. The asking prices of the three homes were three at $499,900 and one at $519,000. In working with a buyer I would help them understand that the range of value would fall somewhere in the mid- $600,000’s, and if they were interested they would determine that is the range they would need to offer to have a successful bid. The frustration comes from the dozens of buyers who feel the asking price is the price the seller wants. Hence the confusion and anger.
This market is one of the most challenging ones that I have seen in my 35 years of selling real estate in Oshawa. We have been successful in getting offers accepted for buyers and sellers, doing our best to obtain market value for both. Using a professional, full-time and experienced agent will help you unravel the market, as crazy as it appears.
The current real estate market reminds me of an experience I had in August 2003. I was at Wonderland with my son and upon leaving we noticed the power in the theme park was out. This was the beginning of the massive power outage. Getting home was mayhem. On the drive back to Oshawa, there were no working streetlights and it seemed like everyone in Toronto was clogging the few highways returning home. This is a visual that describes our real estate market. Carloads of people coming to Oshawa and trying to beat everyone to their destination of buying a home. One difference is purchasers don’t say “sorry” to the other buyers in line when they win.
If you have any question about the above information, or if you see a real estate emergency on the horizon, I can be reached at firstname.lastname@example.org.