Home bidding wars intensify in these southern Ontario communities
Published April 5, 2024 at 3:30 pm
Those looking to buy a home may want to avoid a few areas in southern Ontario where bidding wars are intensifying.
The real estate market is starting to heat up — with increases in sales and prices in Mississauga last month.
And a Mississauga home sold for $211,100 over the $1,299,900 list price in March.
A wave of overbidding that started in the Greater Toronto Area’s housing market in February crested higher in March with the arrival of the spring selling season, according to a new report from Wahi, a digital real estate platform.
“We’re beginning to see more homebuyers step off the sidelines, resulting in more bidding competition in a growing number of neighbourhoods,” said Wahi CEO Benjy Katchen.
But more than half of the neighbourhoods remain in underbidding territory and a significant number of buyers still appear to be purchasing homes below-asking, particularly in the condo market, Katchen said.
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About 61 per cent of neighbourhoods in the GTA were in overbidding territory for non-condo homes (homes without monthly maintenance fees) in March, up from 39 per cent in February, while approximately one-third were underbid.
“The condo market may be facing some pricing pressure from new-build condos entering the resale market via assignment sales,” said Katchen. “As higher interest rates have taken their toll, many units purchased two-to-three years ago are now hitting the market at discounts from the original purchase prices.”
When a neighbourhood is in overbidding territory, it doesn’t necessarily mean that every home is selling above-asking, the report notes. Instead, it’s a general reflection of overall market behaviour, which can be influenced by seasonal factors, for example, or decisions by sellers, such as to list homes below market value to try and attract more bids.
All of the top five overbidding neighbourhoods were located within the Municipality of York.
The top underbidding neighbourhoods were in Toronto, York and Halton. In past months, the region’s most underbid neighbourhoods had tended to be significantly more expensive than the top overbidding neighbourhoods, but the price gaps between the two narrowed in March, the report notes.
Wahi determines overbidding and underbidding neighbourhoods by comparing the differences between median list and sold prices, excluding those neighbourhoods with fewer than five transactions in a given month. The top overbidding and underbidding neighbourhoods are ranked by the median overbid or underbid amount.
For more information, see the Wahi site here.
Lead photo: RDNE Stock project
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