There’s A Lot of Overbidding Happening in Toronto Right Now
By the time he bought a place, in his third bidding war, he had logged 75 properties. I can’t imagine buying now, when prices are 20 per cent higher and the desperation 20 times as thick. The entire city is caught up in the action: one buyer who recently went up against 11 other bidders told me about trying to enjoy dinner with her husband in a restaurant while waiting to find out if their offer had been enough. A waiter overheard their conversation and asked if they were bidding on the same nearby house as another couple in the restaurant. They were. “He told me, ‘They just got it,’ ” she recalled. “I wanted to punch him in the face.”
The housing market in Toronto, Canada is red-hot right now, and has been for a while—even weathering the mortgage crisis in the U.S. This has caused people to whisper about a housing bubble, and write long features about how crazy it is to buy a house up there right now. Maybe one of our many Canadian readers can explain the situation a little better, but Toronto’s housing market sounds very similar to New York’s housing market right now, which is to say: insane.
---
Previously on The Billfold
---
---
---
I have no fucking idea. People should just hold off on buying houses if they can’t get one. There are also way too many tiny, way overpriced condos.
http://www.theglobeandmail.com/life/home-and-garden/real-estate/
VILE FILTH AWAITS.
My favourite “Home of the Week” is Leah MacLaren’s attempt to sell her last-chance bachelorette pad (funny how marriage and babies tend to follow significant real estate ventures).
USA equivalent of Leah MacLaren… Lena Dunham, maybe? Think oversharing overprivileged spawn of media moguls, who somehow anoints herself the singular voice of a generation.
At any rate… way to bully the pulpit, Leah. Purchase an ad like everyone else next time.
Welp, there was this article on the dear old CBC up here. Anyways, there are two main schools of thought in Canadia: “soft landing” vs “crash and burn”, with the people who just bought houses whispering “But real estate will always accrue in value, yes? Yes?”
We can still get variable rate mortgages with 5% down (in my ‘city’, there is also a municipal program you can apply for that will give you a loan for 5% down on a domicile, which effectively means 0 down mortgages, yay. In case you’re wondering, the program is limited to ~45-70k households on houses that are $180-280k.) Also all mortgages with less than 20% down must be insured…by the government! So we have potential for clusterfuckery, I suppose. Anyways everyone is house mad up here. Except for those that aren’t. The only thing everyone can agree on is that everybody (except for themselves) is taking on too much debt.
This is what was happening in Edinburgh (and I imagine plenty of other places in Scotland) about 5 years ago before the market went downhill. In Scotland, the system is an ‘offers over’ one, so people put their house on the market with a price, and you offer over it.
At the time, things were going for like, 50% over the ‘offers over’ price and it was totally bonkers because it’s a closed-bid system so you had no way of knowing if your bid won until the closing date. There wasn’t really any negotiating. INCREDIBLY frustrating. My partner was buying our flat and the estate agent was basically like, when you find a place you want, you have to go way, way over if you want any chance of getting it or else don’t even bother. What he ended up paying was actually over 50% more than the offers over price. And you also had no way of knowing what the next highest bid to yours was, so it could have been £2,000 less or £10,000 less.
Anyway, then the market died and everything is going for fixed price or way lower than it was then anyway. And it would be silly to sell anything now that was bought then because you’d never get close to what you paid. Uck.
I’m pretty sure this is jut an article about Las Vegas circa 2007 and someone changed the place names. Enjoy your recession, Canada.
First of all, this is comic gold: http://fmllistings.com/
Second, the secretly amazing thing about Toronto compared to say, New York (or even Vancouver) is that you can still rent a great place for decent money. When I first moved here, I could even afford to live BY MYSELF (on an ARTS ADMINISTRATOR SALARY) which, after years of living in the aforementioned Vancouver, seemed like a miracle. Now my partner and I rent a great two bedroom apartment in a really lovely and convenient neighbourhood for super cheap, all inclusive rent.
@kettle Thank-you for the link! So good!!!
This is why, despite the poor job market and my declining home value, I don’t actually want to leave where I live… it’s really nice that I live somewhere I can afford to buy property. I like being a homeowner… and I like that I’m not up to my ears in mortgage.
This is late to the game. Sales have been grinding to a standstill in major Canadian markets (including the Centre of the Universe, Toronto) in recent months, thanks to a combination of government regulation changes, skyrocketing prices, and a lack of new buyers (70%+ of Canadians live in a home owned by someone in their family now). There’s some question as to whether house prices will crash, or experience a “soft landing”. I’m unaware of any bubble that’s ever experienced a soft landing, and how the hell is the average family supposed to afford an average house?
Plus, Canada almost always follows US financial trends by 5 years. @blueblazes, I think you called it.