A recent story on CTV News titled “Calls grow to end “blind bidding to cool red-hot” housing markets across Canada” prompted me to write this post.
Frankly I fully agree with this story. Over the past year or more the real estate market across Canada including locally has gotten out of hand. It has clearly been a seller’s market and has allowed home owners to maximize the equity they have in their properties but the same cannot be said for buyers. Yes the real estate market is driven by wiling sellers and willing buyers but matters have appeared to have lost all sense of value, reason and we are seeing it at all levels of pricing. We all know that over time real estate is a good investment but just like the stock market or oil pricing it too has its ups and downs. We are overdue for a market correction and a return to a more balanced market.
The current level of pricing with homes selling for tens if not hundreds of thousands of dollars over asking cannot be sustained and their will be a day of reckoning, there always is. As professionals the real estate community needs to stop boasting on Facebook and elsewhere about selling one of their listings at ______% over asking. Signs posted saying “Coming Soon to REALTOR.ca” and holding offers for days in order to build the bidding frenzy needs to be curtailed. These tactics are only adding to a market that over the long term just like pricing is not sustainable. Further, it is not healthy to a stable economy which we will fight to get back to following the defeat of COVID 19. Some buyers that are winning in the current bidding wars may be thankful and laughing now let’s wait and see how they feel a couple of years from now. I sold my Collingwood home during the 1992 recession for less than I paid five years earlier. No one should believe that similar circumstances won’t happen again. They will and the only unknown right now is when.
As REALTORS® professionals my belief is that our role is more important now that ever. Counselling our valued clients on both the selling and buying side must come first. Returning to a healthy and balanced market benefits everyone not the least of which is the Canadian economy overall and our very way of life. Inflated housing prices has once again stirred talk of a “capital gains tax” on our principal residences. Is that what we want? I think not but rampant spending and increased government debt levels to fight COVID 19 and stimulate our weak economy will need to be recouped somehow.
Clearly something has to change for both today’s homeowners as well as for those looking to purchase a home in the future. “Essential services” has become a COVID 19 buzzword, nothing is more essential than having a roof over you head. We need to get back to making that a reasonable and attainable goal for all Canadians both sellers and buyers and we as REALTORS® need to be part of that solution.