Remember all those months ago when I was so gung-ho about buying a house in Toronto? My HB and I got pre-approved for a mortgage, we got ourselves a realtor, and we dedicated what seemed like all of our free time to looking at listings and participating in bidding wars.
Before we started looking, we were adamant that this was the right time to buy. Average house prices in Vancouver topped a million bucks, but you could still find a nice bungalow in Toronto for under $500,000. Or so we thought.
Once we actually started looking as serious home buyers and not just browsing MLS, we found out quickly that the list price and the selling price of a home were two very different numbers. For example, one house we saw was listed for $489,000 and sold for $625,000. After almost two months of house hunting, we realized that this in fact was not the right time to buy and decided to end our search.
- Beware of the Buyer Representation Agreement When Shopping for a House
- Another Week, Another Round of House Hunting in Toronto
- My First Bidding War: But Not My Last
- House Hunting Checklist: My Must-Dos When Checking Out a House
- House Hunting in Toronto: My Experience in a Seller’s Market
That was back in February, and two months later I am so glad we called it quits. During the whole house hunting process, we were both incredibly stressed out. Because Toronto’s real estate market is so competitive, every house we saw we felt pressure to put an offer on. Even if we didn’t really want the place.
There was a lot of “Well, if you don’t bid on it, someone else will.” And of course several other people would bid on it and it would sell for well over asking within a matter of days.
I was honestly hoping that the housing market would calm down in time for summer and we could restart our search. I mean, it’s unsustainable for housing prices to keep going up, up, and up!
But alas, because interest rates are staying put and home buyers are paranoid that if they don’t buy now they’ll miss the boat, people are still willing to become house poor for a chance at owning instead of renting.
Remember my crazy bidding war experience? I remember telling my friend Hiroshi (a realtor in Vancouver) about it not too long ago and he said he never heard of anything like that happening on the West Coast.
Well, I think the West Coast just needed a few months to catch up because bidding wars are par for the course there too now. I talked to my mom the other day and she told me a home down the street from her got 17 bids and sold for over $100,000 over asking price.
The crazy thing was it wasn’t anything special. It was an older two-level house close to a school. But it wasn’t immaculately renovated on the inside or anything. It was just a house on a piece of land and home buyers went absolutely crazy for it.
So I guess our break from house hunting is going to extend until at least next year. I still really want to buy a house, or maybe even a condo or townhouse, but not if it means buying in a market like this. If there’s one thing I do not want to ever be, it’s house poor.
I’d honestly rent for longer than I’d like for the security of knowing that if something ever happened to my HB or myself (sudden illness, loss of job, whatever), we’d be financially okay.
I don’t want to rent forever, but at this very moment I honestly feel like we dodged a bullet by not buying a house in Toronto right now. When the time is right we’ll start looking again, but right now I’m loving the freedom of not being tied down to 30+ years of debt.