It’s one thing for house sale prices to be rising as fast as they are, but what about the value of homes that aren’t put on the market?
Often, when statistics about house prices make the news, the numbers in question relate only to properties that have been sold.
When the average sale price in the Kitchener-Waterloo market increased by 10 per cent between January and February, that didn’t necessarily mean every house in the area was suddenly worth 10 per cent more. It could have been an aberration caused by an unusually high number of luxury homes hitting the market, for example.
Every three months, Royal LePage releases a house price survey designed to look at changes in house prices as a whole.
The latest version of that survey was released Tuesday. It found that the aggregate price of a home in Waterloo Region now sits at $400,902 – more than 14 per cent higher than the figure from one year earlier.
Two-storey homes saw the largest price increase – up 14.9 per cent to a median figure of $423,258 – while bungalows rose by 12.8 per cent to $365,625 and condos by 11.5 per cent to $255,724.
Keith Church is the broker of record for Royal LePage Grand Valley Realty.
Like most other people involved in the local real estate industry, he sees two big reasons for those increases – a surge in demand, fueled by Toronto-area homebuyers moving westward, and a relative lack of supply.
“The largest factor is the number of people moving out here from the GTA,” Church said in an interview.
“The market is so hot and strong in the Toronto area that the people are moving out here to buy more affordable homes.”
For those people, the prime driver is that their money will get them a lot more in Waterloo Region than it will in Toronto.
In many cases, Church says, homes are selling for “unconditional cash offers” to people who have their financing lined up and are willing to forgo a home inspection.
“They have a lot of cash at their disposal, because they’ve sold their property for more money,” he said.
“It makes it a challenge for local people to buy when they’re competing against those people who are moving out here.”
When Falah Alizzi listed his home for sale recently, he figured he’d get somewhere around the $738,000 asking price.
During one open house, 14 prospective buyers showed up. Nine of them were from the Toronto area.
Alizzi ended up selling the house for $765,000 to a buyer from a lot further away.
“He lives in the United States – in Atlanta, Georgia – and hasn’t seen the house,” Alizzi said.
Alizzi is happy with the selling price. Because he’s planning to downsize, he’s not even especially concerned about not being able to find a new home.
“I’ll find something,” he said.
“I have a tent and I have a camper. I’ll probably just camp for a few weeks or a few months until I find something.”
What does have him worried is thinking about the effect the influx of GTA residents will have on his daily commute to Brampton – which he could do in 50 minutes more than a decade ago, but now takes much longer.
If more people choose to commute between the two communities every day, he figures, gridlock on the highways will only get worse.
With reporting by Nicole Lampa
