THE WORD ON THE STREET
A NEW NORMAL IN KINGSTON REAL ESTATE?
Actually there is no new normal or any kind of normal at all in Kingston real estate these days, any more than our lives are normal in pandemic times.
Instead, real estate has gone crazy across the country as people search for homes with more comfort, amenities, and space.
Country homes, which have traditionally sold slowly, are now as hot as city homes. The pandemic and the work-from-home wave has fuelled an unprecedented sellers’ market in even the most remote corners of Frontenac County.
The average price for a residential home in the Kingston area shot up 30 per cent in the past 12 months. As of April 2021, it reached $621,000. But despite windfalls for some sellers, this is a difficult and unbalanced market for everyone, including real estate sales people, who have seen the profession hammered in the media recently by upset buyers.
Under current blind-bidding regulations, the listing Realtor® is not permitted to disclose any details of competing offers, except for the total number of offers submitted to the seller. Buyers complain this is needlessly driving up already high prices.
To avoid this, many Realtors® are now using escalation clauses in offers, where a buyer agrees to increase their offer by a certain increment up to a certain limit, in order to defeat other offers. This tactic is very useful, when carefully managed and understood.
The question on many minds now is how long will this overheated market continue? CMHC has just predicted a 14 per cent rise in prices in 2021. Although they blew it spectacularly last year by predicting an 18 per cent drop in home prices, I think they’ve got it right this time.
Local inventory (number of properties for sale), has been on the low side for almost five years now, well before the pandemic, and it’s going to take some time for the market to accommodate the huge backlog in demand.
Those of us who watch this market carefully have already started to see a very slight pull back in sold prices. Yet they are still averaging nine per cent over list price in the city of Kingston. Personally, I’m seeing strongest demand for the kind of listings that used to be the slowest to sell - roomy country properties and raw land.
New homes under construction are pretty much sold out in Kingston, and buyers waiting for a new home are often looking at late 2022 possessions. And in a worrisome but not unexpected trend, there are also an increasing number of commercial properties coming up for sale and lease.
Oh how I long for the good old days…
Kay Langmuir, B.A. Honours Political Science, Bachelor of Journalism