By Staff
May 27th, 2021
BURLINGTON, ON
Real Estate agent sends in a news tip along with a photo of a house he sold for $420,000 over asking.
Agent reports that the property sold for $420,000 over asking.
That’s not really news in Burlington. What is going to be news is the impact these sky high property prices are going to do to the makeup of the city in the long-term.
Great for the people who sold. The people who bought might feel that they got in before prices got even higher.
Real estate prices can’t keep rising at this rate. It is no longer a stable market and at some point someone will intervene: Federal government; CMHC, or the banks, and when the contraction takes place it will be painful.
Everyone will be hurt.
This home was underpriced to sell high…. it backs onto Bronte Creek…. headlines are very deceiving.. read the whole article and ask someone local about other sales in the area.. asking vs. received pricing isn’t very relevant these days so much as consistent sales numbers to validate what they got. Plus then look at the fact that it’s mostly Toronto buyers coming through which is raising Burlington pricing (which by the way is still way lower than Toronto pricing..) Bubble? With so little inventory, low interest rates and hardly any new builds happening, I think not..
If ever there was a sign of problems in this city, this is it. A standard subdivision cookie cutter home in the Orchard selling for over $2.1 million? This house was originally priced at just under $1.7M which already seemed ridiculously high, and then to have it actually sell for over $2.1 million – WOW! This should be a real eye opener for the Mayor and Council.
It’s easy for everyone to blame “greediness”, but that’s not the case at all. House prices, whether set by Realtors or home builders, are 100% market driven. If it’s priced higher than the market can afford, it doesn’t sell. Put yourself in the shoes of the seller or builders, why would you ever sell for less than the market can afford? Maybe you can’t afford it, but clearly there are others who can! In this case, the house was listed for just a few days and then sold for $400K over asking. It wasn’t a slick trick by the real estate agent, it’s a sign that something is seriously wrong in Burlington. Supply is not keeping up with demand.
With the Mayor and Council and nimbyism frustrating new residential development in this city, one of the best cities in Canada to live in, is it any wonder we’re finding ourselves in this mess? People want to live here, but it’s tough to get in. The good news is that if you already own a home here, you’re set to make a nice profit if and when you ever decide to sell and move 2 hours away from the GTA. Moving locally will be a challenge, but if you can move away from the GTA, you’re golden. The bad news is that unless you create a basement apartment for your kids, they’re likely never going to be able to afford to live here.
This is the reality we have created for ourselves, and unless Council is prepared to actually do something about it, expand the urban boundary and flood the market with a major supply of new housing in Burlington (which I can’t see happening), don’t expect anything to change.
Every year for over 20 years people have said house prices will come down, they’ve got to, right? And every year for over 20 years house prices have continued to climb. It comes down to basic supply and demand. Like it or not we’re in the GTA, and with immigration steadily pumping more and more people into our communities each year, the demand is only going to continue to grow. The market isn’t unstable. This IS the market for this area. This IS what a stable market looks like when demand is so high and supply is so low.
Hey, James. You are right it is presently a lack of support that is fueling the price increases. The City’s attitude towards development has no bearing on the market. It’s an Ontario, or Canada thing. Not a Burlington thing.
But i don’t think you’re right about the real estate agents and their sales strategy. The in vogue strategy is to price below what the vendor wants as a sales price and then have a blind bid. Offers are held until a set time and date to be opened. This creates nervousness with the vendors who inflate their bids. So selling over asking price at this part of the market cycle is standard.
Burlington the best city to live in Canada. Do you think it will remain that way with massive developments. I’ll tell you a real life story. In 2008 I bought a place in Cabo San Lucas, Mexico at the southern tip of the Baja peninsula. Cabo was a quaint little sport fishing town that had sun, sea, desert and mountains. The sidewalks were in such disrepair you really had to be careful when walking. There were many artisan type stores. Ideal ! Now 13 years it has lost much of its charm. The artisan stores are gone replaced by tshirt stores and designer label stores on a mall. There is now a Walmart even. Why has it changed? Because outsiders like me found it and it became touristy. Cabo is a much more affluent place, but it has lost its soul.
The Mayor is in a way saving ourselves from ourselves.
Once upon a time the strategy to meet the demand for growth and affordable housing was ‘infill’. What we are seeing instead is a process of tearing down a perfectly habitable family house on a decent lot and replacing it with a McMansion built right out to the property lines. Former owner makes a bundle. Developer makes a bundle. Real Estate agent makes two bundles. Somebody is left with a debt they may have to default on when things return to normal. What could go wong?
David you are as wise as ever.
Houses are being listed at below market value to create a buying frenzy.. Did this house sell for more than $400,000 more than the same houses on the street? I think not. Low supply, high demand. why is anyone surprised.
This City has some of the most idiotic useless regulations that obstruct the construction of homes in a timely and affordable manner. Many builders have left and have taken their high paying jobs with them. It’ a little difficult to keep prices down when your City only processes a handful of new home building permits a year. in a City of 200,000 people..
The effect on property taxes will be interesting.
None of the Fedal government, the Provincial government, CMHC or those despicable banks want a market contraction. A market contraction implies a drop in house prices, resulting in homeowners having negative equity and defaulting on mortgages. None of that would be positive for the real-estate market or the Canadian economy. So don’t expect a contraction. But do expect intervention by way of tighter mortgage qualification rules and or higher interest rates so as to cool the marketplace and curtail the steep upward spiral of prices.
There is definitely a trend where real estate agents suggest listing at a price $100,000 to $200,000 below the sale price targeted by the vendor in the hope, anticipation that multiple offers will come in boosting offer prices above the vendor’s target sale price. Presently, that strategy is very effective.
People who stay out of the overheated market wont be hurt. The market has all the mechanisms to self adjust, and intervention just distorts things.