Last week I told you about Jane’s house going on the market in one of the sizzling burbs of the Big Smoke. Two weeks earlier a similar house on the same street traded for more than $900,000. Jane’s realtor listed at that level, holding an Offer Night and trying to kindle a bidding war.
Crickets. Listings have just started to erupt, the agent then told her. So they tried again, at a seriously lower price.
She called me Saturday morning. “An offer came in,” she gushed. There were no multiple offers. No moisters lined up on the curb. No buzz. No event. “Eight hundred. Should I take it?”
Yesterday this pathetic blog told you about the changing dynamics of supply and demand in the last two manly markets in the nation. The number of available properties in the GTA and (especially) Vancouver is hardening fast, just as it seems demand is growing flaccid. The latest barrage of headlines – TORRID HOUSES SIZZLE 33% HIGHER – seems to have had an impact. This is a market on borrowed time.
And Jane may be among the last cohort of buyers to get out near the moment of peak house. On Monday the wildly unpopular premier of Ontario confirmed the hammer’s about to fall on the horniest of all housing markets in the land, “very soon.” That might be tomorrow, or it might wait for the budget expected in the next three weeks. But the preem says you should buckle up now.
The measures will have “a swift impact” on real estate, with the clear intent of cooling the market and (obviously) rolling back prices. The details? Unknown. But she has already indicated rent controls will be imposed on every leased property in the kingdom – kicking all amateur landlords in the financial nads – while her finance minister has mused about a tax on foreign dudes, a special levy on speculators or even some kind of capital gains tax on people who own properties for a short period. Bringing up the rear is the Toronto mayor, who’s spoken kind words lately about Vancouver’s idiotic Empty Houses Tax.
Put it all together, and you probably have a mess. Will it be a market killer? Beats me. But the potential’s clearly there.
People are already getting the message. Almost half of homeowners planning to list their homes soon say they’re worried political actions will torpedo house prices, according to a new CIBC poll. And all this talk about rent controls has persuaded about a third of them that, when they do bail out, becoming a tenant is the rational thing to so. (By the way over 40% of these people are smart little devils, saying they’re selling because they want a pile of tax-free windfall profits.}
Making all this even more interesting are the wrinklies.
The bank found almost 70% of Boomers now plan to sell their houses – and most of them are doing so because (a) they need the money, (b) want to downsize and (c) they feel terrific about giving some horny moister couple a chance to shoulder eternal, crippling debt and finance their retirement.
Of course, it gets worse. (Don’t you love this blog?)
Those same Millennials the Boomers are counting on to create the biggest inter-generational wealth transfer in history (from the young to the old) are starting to wise up to this scam. New data shows a staggering 81% of moisters who own a home plan on selling, with 63% of them saying they want out – real estate was a disaster, Hoovering them dry. Meanwhile six in ten of the kids worry that rising interest rates will make their mortgages unaffordable and 36% conclude renting is best.
Yeah, they’re still brain-washed, with 54% of the 18-to-34 set believing house prices “will never come down”. So cute. But the combination of despair at current prices and the realization that buying at these levels is a financial sinkhole is taking its toll.
So, figure it out. Supply of houses is mushrooming. Governments are aiming a firehose at the market. Homeowners are worried the thing’s rolling over. Eight in ten Boomers plan to exit. And the cohort they want to sell to is busy changing its shorts.
So should Jane accept the offer?
She did already. Boomers, 1. Mills, 0.