After client, 41 others place bids on single home, Vancouver realtor wonders: Is buyer fatigue going to set in?
Adam Chahl has seen how the current hypercompetitive real-estate market looks like from both ends of a deal.
As a seller’s representative, the Oakwyn Realty agent recently sold a Surrey property for $1,650,000.
The detached home at 16224 110A Avenue received 12 offers, and the selling price was $175,000 over its listed price.
As a buyer’s agent, Chahl worked with a client who wanted to purchase a single-family home in Burnaby.
They submitted an offer for 4615 Pender Street, which was listed with a price of $1,499,000.
It turned out that 41 other prospective purchases made bids on the same property.
The Burnaby home sold for $1,715,000, which was $216,000 over the listed price.
Chahl's client lost the bidding war.
Chahl noted that a lot of home buyers are getting discouraged in this current market that is marked by strong demand and low inventory.
“I wonder if we’re going to see almost a buyer’s fatigue set in, where people say, ‘You know what? Forget it. We’re not going to shop anymore. We're just going to wait and see what’s going to happen till things calm down’,” Chahl told the Georgia Straight in a phone interview.
Buyer fatigue happens when people hunting for a home feel disheartened.
After seeing too many multiple offers, they get burned out.
As a result, some decide to sit it out.
To see as many as 42 bids on a property like 4615 Pender Street could be emotionally draining.
Chahl hears this sentiment these days.
“The question I’ve been having a lot with buyers recently is, you know, ‘Should we just put this on pause and see what you know kind of inventory level come on in the spring?’” Chahl related.
Real estate boards touched a bit on this subject in their recent reports about the February 2021 market.
The Real Estate Board of Greater Vancouver (REBGV) reported that 3,727 homes sold in February 2021.
The number means a 73.3 percent increase from February 2020, and a 56 percent increase from the homes sold in January 2021.
“Metro Vancouver’s housing market is experiencing seller’s market conditions,” REBGVchair Colette Gerber said in a media release.
According to Gerber, the supply of listings isn’t keeping up with the demand.
“Competition amongst home buyers is causing multiple offer situations and upward pressure on prices,” she also said.
For all property types, the sales-to-active listings ratio for February 2021 was 44.6 percent.
According to the REBGV, downward pressure on prices occurs when the ratio dips below 12 percent for a sustained period.
Home prices experience upward pressure when the ratio surpasses 20 percent over several months.
Meanwhile, the Fraser Valley Real Estate Board (FVREB) reported a total of 2,815 sales in February 2021.
Last month’s sales represent a 108 percent increase compared to February 2020, and 64 percent more January 2021.
“We understand the stress and frustration with the market currently and we’re here to help guide and protect home buyers,” FVREB president Chris Shields said in a media release.
The FVREB also reported that the total active inventory of homes for sale in February 2021 was 4,120, down 28 percent from last year’s 5,741 active listings.
According to the board, this was the “lowest ever for the month” of February.
Frank Karabotsos was the seller’s realtor for 4615 Pender Street in Burnaby.
The property agent with RE/MAX Crest Realty in North Vancouver has been in the business for nearly four decades.
According to Karabotsos, he has never seen anything like what happened with 4615 Pender Street, which received 42 offers.
“It’s definitely not normal,” Karabotsos told the Straight in a phone interview.
“I mean, it’s the highest number of offers I’ve received in my 39-year career,” he added.
Karabotsos recalled that multiple offers were also made when the market was active between 2016 and 2018.
During that time, 10 to 12 offers were considered to be “significant”.
But 42 offers these days on one property?
“Well, I mean there’s no question, it was a surprise,” Karabotsos said.