The housing market appears to have gone crazy.
Adam Chahl sold two properties on the same day, and the principal of Oakwyn Realty’s Place Real Estate Team describes what it was like.
“It was insane,” Chahl told the Straight in a phone interview Thursday (January 27).
The U.K.-grown and –educated realtor isn’t one to exaggerate.
His listing of a detached home in Coquitlam got 41 offers.
The buyer took it subject free, meaning the purchaser didn’t attached any conditions to the successful offer.
Chahl’s other listing, which was a condo in Port Coquitlam, received 15 bids from buyers.
Needless to say, both properties sold over their respective asking prices and current assessment values.
So what’s happening out there?
“There’s nothing available,” Chahl said about the lack of homes listed for sale.
Inevitably, the law of supply and demand kicks in.
The result: higher prices.
But as Chahl explained, increasing prices only worsens the problem of supply.
That is because homeowners are “scared” to list their place.
Because they don’t feel confident that they can get another home that they can afford.
“So the more the prices increase, the more the problem compounds, because as prices get higher, the inventory becomes less and less,” Chahl said.
Here’s a quick rundown of the two sales made by Chahl.
The detached Coquitlam home at 2933 Albion Drive came on the market on January 5 with an asking price of $1,199,000.
The three-bedroom and three-bath residence sold on January 10 for $1,612,000.
That’s $413,000 over asking.
Per B.C. Assessment, the two-storey home built in 1985 has a 2022 valuation of $1,284,000.
As for the Port Coquitlam condo, the apartment unit at 306-2599 Parkview Lane was listed on January 4 for $499,000.
The two-bedroom and two-bath condo sold on January 10 for $670,000.
That’s $171,000 more than the listed price.
The property has a 2022 assessment of $535,000.
The B.C. Real Estate Association highlighted low inventory in a January 12 report.
The BCREA noted that 2022 started with a “record low” of 12,179 homes available for sale.
That was because of the busy market in 2021, when sales totaled 124,854.
“Listings activity could not keep up with demand throughout the year,” BCREA chief economist Brendon Ogmundson said about 2021.
“As a result,” Ogmundson continued in the January 12 report, “we start 2022 with the lowest level of active listings on record.”
Chahl noted that the situation has resulted in a strange situation.
Homeowners wanting to upgrade have now become part of the “problem” because they’re not listing their properties.
But that’s completely understandable.
“Where are you going to go?” Chahl said.
Chahl noted that what’s happening is that households are saying “oh no, we should buy first before we list’”.
And this totally “makes sense”.
But then again, that’s not helping supply, and so prices go up some more.