A Halifax realtor who’s been in the business for more than three decades says he’s never seen the housing market as hot as it is.
Mark Stein, a broker with Priority 1 Real Estate, said he’s been “flat out” in recent weeks.
“The biggest problem is finding homes mostly for first- or second-time buyers that don’t have millions of dollars to spend. It’s just very, very difficult,” he said.
“In my 32 years I’ve never experienced anything as – I don’t want to say the word crazy – but anything as challenging as it is.”
He said the market in 2022 is different than last year.
While there was already a shortage of homes and lots of people looking to buy in 2021, Stein said this year “the buyers seem to have multiplied and the listings have decreased.”
“We’ve gone from having six offers on a property averaging in 2021, to now 12, and 15, and 20 on listings in 2022,” he said.
“So it’s a frustrating market. It’s a frustrating market for realtors, it’s a frustrating market for buyers. But it is a win-win for sellers.”
Stein said he’s been working with a number of buyers who have been looking for a home since last fall. He said the majority of buyers he works with are not investors and are looking for a home for themselves.
Most of them have already offered on at least a dozen homes each, he said, but haven’t been successful.
“So the amount of time I’m putting in with the average buyer has really tripled what I would normally do any other year,” said Stein.
If a house is listed for $300,000, he said, it will likely go for around $500,000.
Recently, one of his clients offered on a home priced at $500,000 – one of about 15 offers – and ended up paying just under $900,000.
“That’s $400,000 over the asking price. That’s another house,” he said. “That’s the scary part for people, but that’s reality.”
The trend of houses going for hundreds of thousands of dollars above asking means it’s difficult for buyers to know what they’re getting into.
“For the first time in my career, I can’t really advise a buyer of what they’re going to have to pay in order to get a property. It’s the same thing when I’m representing a seller, that you can’t pinpoint what a house would likely sell for,” he said.
Prior to the pandemic, Stein said he could do comparable market analysis to see what else was sold in the area and what else was on the market. That’s no longer the case.
“Then we’d get an average, we’d figure out, ‘Well, your home will sell between A and B.’ Today, that A and B could be a matter of hundreds of thousands of dollars,” he said.
“Part of my responsibility is to be able to tell buyers and sellers, based on my expertise, what they can expect. And that’s becoming more difficult to do.”
High prices here to stay
Home prices have been skyrocketing over the last two years. According to the Nova Scotia Association of Realtors, the average price of homes sold in March 2022 was a record $450,581, up 23.3 per cent from March 2021.
According to the Canada Mortgage and Housing Corporation’s latest housing market outlook, home prices in Nova Scotia will continue increasing between 2022 and 2024, “albeit at a slower pace.”
Stein said the biggest issue boils down to supply. He said the municipality needs to streamline more permits to allow more residential buildings to go up.
“It’s better to have a balanced supply and a balanced demand. Then buyers will have a choice of what they can buy, and the sellers will get fair market value,” he said.
“But when the supply is so low and demand is so high, people are really paying inflated prices.”
But even with more supply, said Stein, “I think these new prices are the ones that are going to stay.”
He said HRM and Nova Scotia’s home prices have long been on the “low end” compared to other cities of a comparable size, and are now catching up.
Stein also doesn’t believe the new non-resident property tax will help cool the market.
Those who own million-dollar summer homes will be able to afford the new tax, he said, while families who own cheaper cottages will struggle with it more.
“So I think it’s going to hurt the wrong people, and the one thing it’s not going to do? It’s not going to help the housing situation, the housing crisis we have,” he said.
“It’s just not, because even if all those summer cottages and summer homes came up for sale tomorrow, that doesn’t help the average person.”
However, even as prices remain high and supply remains low, Stein is encouraging first-time homebuyers not to lose hope.
He said people should “expand their horizons” by looking outside of the areas where they wanted to buy or consider options outside of single-family detached homes.
“You have to be patient and keep trying,” he said. “Just keep trying, and you will eventually find the home that you want.”