Potential homebuyers 'have to adjust expectations' in hot Manitoba housing market

Manitoba's housing market is on fire and it's leaving many aspiring home buyers feeling burned.

Jamie Taronno and his wife have been looking to buy a home since last spring, when the COVID-19 pandemic was new. At the time, they were excited.

"We didn't think anyone would have the bravery to go shopping," said Taronno.

They were wrong. As the couple started bidding on houses, they had to compete with eight or nine other counter-offers, he said.

"We kept doing it over and over again, to the point where whatever the listing price was we didn't believe it anymore," Taronno said. "We ended up giving up because it was too much.

"You can't get your hopes up and have them dashed that many times in a row."

February was a historic month for the province's housing market, with 1,294 properties sold and total sales reaching $411.6 million, according to the Manitoba Real Estate Association.

"The current housing market is very hot. Very high demand," said president Stewart Elston.

But there are also fewer listings.

"Over the last year, the number of listings coming to market has been less each month," he said. "It has put a lot of upward pressure on price, and as a result we've seen a lot of multiple offers [put on a property]."

DavidDe Leeuw, a veteran real estate agent of 40 years, is seeing many homes sold significantly over asking price, with about 10 to 20 offers per property.

Some properties were underpriced to begin with, he said. But in many cases the amount of competition is driving the selling price higher.

De Leeuw has seen many homes sell from $10,000 to $50,000 over the original asking price. Occasionally a home will sell at $80,000 over asking price, he said.

A home in Winnipeg's Crescentwood neighbourhood was listed at $399,000, then sold for $520,000. "A little bit underpriced to begin with, but still incredibly high bids," said De Leeuw.

The average selling price last month was $318,074, according to the Manitoba Real Estate Association.

Anyone looking to buy has had to expand where they might want to live, or look for houses that could be renovated, said Elston.

If potential buyers have a budget of $330,000, for example, they need to be looking at properties with asking prices far lower than that, said Elston.

"People have to adjust their expectations," he said.

De Leeuw believes the COVID-19 pandemic is responsible for the current housing market. Whether due to public health orders, remote learning or working from home, many people are spending the vast majority of their time at home.

"Housing has become so much more important for everyone, that everyone wants a place where they can spend more time away from the rest of the world and that's not going to change quickly," he said.

After quitting their initial housing hunt, Taronno and his wife opted to rent a place and planned on looking for houses again in fall 2021.

"It's looking like it's more of the same, so that's something to look forward to," he said.

Given thatthere isgreater demand than supply in the housing market, De Leeuw expects prices to stay around their current levels for at least a year or two.

The Manitoba Real Estate Association is hoping that, as more people receive their COVID-19 vaccine, homeowners may be more willing to put their properties on the market, said Elston. That should increase demand and decrease the competition and prices.

In the meantime, De Leeuw suggests buyers buy sooner rather than later, because prices will continue to increase in the short-term.