Home sellers’ expectations are too lofty and that’s stunting the housing market, claims a missive from RE/MAX Escarpment Golfi Realty Inc.
“While market activity was up 103.6% year-over-year, the Canadian Real Estate Association has noted a decline in national home sales by 7.4% on a month-over-month basis in May,” said the statement.
“Unfortunately, sellers are getting caught up in the previous numbers of the market or hear about a neighbour who sold their house for X amount of money a few months ago, and believe their house is worth the same or more. Many agents in the area are having trouble coaching and supporting both buyers and sellers.”
The letter also says that some sellers realize weeks later they botched good offers, and that the sooner they understand the market has entered an adjustment phase, the better.
Exorbitant price points, especially in Canada’s three biggest cities, could begin manifesting in atypical household formations, says the RE/MAX 2021 Housing Affordability Report, which found that of Canadians considering alternative ways of becoming homeowners—renting out part of their primary residence, pooling money to purchase a home with friends and families, living a co-op or shared living arrangement—54% of them are millennials and Gen Z.
The survey of Canadians conducted by Leger on RE/MAX’s behalf found that 42% of respondents believe the price of real estate is financially prohibitive and a barrier into the market, up from 38% in 2020. Millennials and Gen Z are also more likely to consider moving to different communities, the survey found.
In the report, Elton Ash, regional executive VP of RE/MAX of Western Canada, applauded the “ingenuity” of Canadians, but added that, in a bid to stymie runaway housing prices, there needs to be a national housing plan that expeditiously boosts inventory.
“It’s promising to see Canadian buyers deploying their ingenuity to be able to buy a home, but we must address the urgency of the underlying affordability problems, which are predominantly systemic,” said Ash. “While we wait for a nationally and municipally supported housing strategy based on an aggressive goal to boost our national inventory of affordable housing, there are regions across the country, especially in Western Canada, that remain accessible to first-time buyers looking to break into the market.”