I have had my Real Estate License now for over 2 years. But we have been buying and selling Real Estate for ourselves for over 40 years. I have never seen a crazier time than the last 2 years. Most of our purchases and sales have been properties we have flipped. It is the very best way to make money. It really helps if you are handy and only need limited help from contractors. That is how you really make money. I never started out wanting to know how do renovations and major construction. But necessity can force you to do something even if you don’t want to.
I don’t regret too many moments. I have learned a lot. My favourite way to learn is to jump into the deep end and figure it out as I go. Not a method I would recommend. Every Real Estate investor knows that the only time you make sure you make a profit, is when YOU BUY!! The reason for that is; that the Buy is the ONLY deal where you have CONTROL!! NO ONE HAS CONTROL OF THE SALE EXCEPT THE BUYER!! That is something that buyers seem to have lost site of. I hear so many people saying that the price of Real Estate is out of control, it is crazy, but not out control. Buyers, and many Real Estate agents, are out of control. If you don’t want to pay more than asking, DON’T OFFER MORE THAN ASKING!! That is how you control the sale. Part of it is also that people are more concerned with Wants rather than Needs. I want out of the apartment because lockdowns are more comfortable in a house.
Multiple offers are the going thing right now. It is just another way of saying an auction.The most popular method of generating multiple offers is, to list the property for a low price, so that more people will look at it, and then hold offers till a certain date. It works great for everyone except the BUYERS. Case in point. The house was listed for $450,000.00. It was a nice simple house. I call it a first time home buyers house. The listed price is not bad for a first time home buyer’s budget. So let’s go look at it. There are showing every hour, so lots of interest. In the end it had more than 6 offers on it and it sold for more than $583,000.00. My guess was that it would sell for $525,000.00
I truly sympathize with buyers who get caught in this for the umpteenth time and loose out. Eventually you just go for broke because you want a house. Not a good thing. So are your WANTS more important than your NEEDS??
In my opinion only, (both as an investor and a Real Estate agent) There are several factors affecting the market. In no particular order here are a few. Lack of properties for sale. The isolation caused by the Covid situation. The cost of building new homes. The greed of cities and municipalities. And Foreign money laundering in the Canadian housing market. At today’s prices there is no such thing as an affordable house.
We are building a new house on a lot in the country. Between the building permit, the road entrance fee, the water flow survey, (not the right name, but it is to make sure no water flows from your property on to your neighbours.) and the development fee, we paid well over $25,000.00. And we are building in a township that is considered reasonable. That was just to the township. We won’t talk about the well fees (besides the drilling). All of those costs become part of the price of the house.
Covid is, in my opinion, a very large factor. We live in the country, in a small spread out community. During lock down we are not as cramped?? in our houses as in the city. We still walk the dog, and talk to our neighbors. Although now it is more shouting, as one stands on the street, and the other on the porch. I can understand people in apartments who have to ride in an elevator with other people why they might really want a house. But the people in the houses have no real reason to want to move out. Even if you can get a small fortune for your place, you will spend it when you buy the next place. This creates the limited inventory we have. Also I don’t think people are being transferred or changing jobs as fast right now, so that again can lead to the limited inventory. So in a nut shell, Covid is causing more potential buyers into the market and causing fewer seller.
Low interest rates are also a factor, making the increased cost more affordable. But that situation will not last. Foreign money that knows no bounds drives up prices as well. So what is the answer? Patience, and follow the rules of Real Estate investing, and tighten foreign ownership rules. (a 15% tax is not enough) Covid will end, (someday,) then the reasons why people live in the city will again be more important than getting out. Did I mention that we have no food delivery out here. In the mean time, do not take it out on all Real Estate agents. There are still some good ones out there. The saying is you have to make hay while the sun shines. Nothing either good or bad lasts forever.