Home prices have climbed much faster than incomes over the last several years, up roughly 53% since 2019 compared with about a 24% increase in median household income.
First-time homebuyers make up a much smaller share of the market than in the past. In 2025, they represented just about 21% of buyers, down from 44% in 1981, and the median age for first‑timers has climbed to 40.
Social and household patterns are shifting too. More young adults ages 18–24 are living with their parents, fewer couples have children, and more people are choosing to live alone. These demographic trends are part of why builders are adjusting what they put into new homes.
“You can’t have housing prices rise that significantly for a sustained period of time and not experience housing affordability issues,” said Rose Quint, NAHB assistant vice president of survey research. “Clearly this will have implications on the size of homes we build and the types of amenities we include.”
In terms of house design, the median home size hasn’t changed much recently, but builders are adding features buyers care about. That includes flexible spaces like drop zones and multi‑purpose rooms and more homes with electric vehicle charging stations.
Builders are also trying different ways to address affordability. Sixty-seven percent are offering sales incentives, and roughly 41% have cut home prices compared with past years.
What buyers want varies by price point, according to the report. Entry‑level buyers tend to focus on value and practical layout needs, while higher‑end buyers often look for extra bedrooms and bathrooms, home offices, energy‑efficient features and community amenities.
Across income levels, outdoor space keeps coming up as something everyone values. Builders are finding creative ways to include patios, rooftop decks or other outdoor living areas, even in smaller homes.
There’s also movement toward offering a broader mix of housing types. Developers are looking at adaptive reuse projects and mixed‑density communities with townhomes or condos to give buyers more options.
As the federal government shutdown drags on, Maryland Realtors warns of growing uncertainty in the housing market. From delays in flood insurance to paused USDA loans, buyers and sellers alike could face challenges.
The longer the government shutdown continues, the more uncertainty could be injected into the process of buying or selling a home.
That’s according to Denise Lewis, president of Maryland Realtors, a nonprofit association representing more than 25,000 realtors statewide.
“I think this is going to affect buyers and sellers equally,” Lewis told WTOP.
Despite concerns about what could happen if the shutdown drags on for a month or longer, Lewis said, “Nothing is coming to a screeching halt.”
The first place that buyers and sellers may feel the impact of the federal shutdown is in the process of getting flood insurance, Lewis said.
“The National Flood Insurance Program can’t issue new or renewal policies during the shutdown,” Lewis said.
However, Lewis said, there’s no need to panic. Realtors are learning about possible workarounds.
“We’re contacting insurance companies and finding out how to get the private insurance,” Lewis said.
There’s another possibility: “Existing policies that are backed by the National Flood Insurance Program can be transferred to the buyer,” she said, but there are some exceptions.
“We’re finding out that it can’t be transferred if it’s in that renewal — like that 30-day, 60-day renewal period,” she said.
Some federal loan programs are affected, including USDA loans, which, Lewis said, “are largely paused.”
“You can certainly identify that that’s the program you want to use, and probably get your loan officer to give you numbers on what that looks like, but they’re not generating any new USDA loans — or closing them right now — until the shutdown ends,” Lewis said.
The Department of Veterans Affairs will continue to guarantee home loans during the shutdown, but according to Maryland Realtors, staffing reductions could delay the processing of those loans. That includes appraisals, approvals and issuing certificates of eligibility.
According to Maryland Realtors, if the shutdown lasts for a month, there could be a backlog in loan approvals and the issuance of flood insurance, for example.
If the shutdown continues beyond one month, the National Flood Insurance Program funding could run out, and that could delay claim payments. And local governments could see a drop in revenues from transfer taxes and recordation fees. According to Lewis, rural and coastal communities could see the greatest impact.
Lewis said the most important thing to do for anyone contemplating — or in the process of selling or buying a home — is to get informed.
“Talk to your realtor. … And find out if there’s anything coming down the pike that could affect you,” she said.
Get breaking news and daily headlines delivered to your email inbox by signing up here.
In 2018, the stress test was expanded to include buyers with more than a 20% down payment (those with uninsured mortgages). Since then, all Canadian home buyers applying through a federally regulated lender—as well as those refinancing their current mortgage—have been required to pass the test.
Has the stress test changed over the years?
Yes. The stress test has evolved in a couple of ways, including changes to the qualifying rate itself, and how the rate is applied.
Until June 2021, the stress test rate was set at either 2% above the contract rate that buyers negotiated with their lender, or at the posted Bank of Canada (BoC) five-year rate, whichever was higher. However, when the BoC slashed rates at the onset of the COVID-19 pandemic, there were concerns that its five-year benchmark rate was too low to adequately protect borrowers from defaulting on their mortgages in the future.
So, the Office of the Superintendent of Financial Institutions (OSFI), a federal government agency that acts as Canada’s banking watchdog, decided to decouple the minimum qualifying stress test rate from the central bank’s rates, and instead use a set floor rate that is reviewed annually.
Another change has to do with mortgage renewals. Previously, if borrowers wanted to move their mortgage to a different federally regulated lender at renewal, they needed to “pass” the stress test again as a new applicant. In late 2023, however, the federal government eliminated that requirement on insured or high-ratio mortgages, as part of the Canadian Mortgage Charter. And as of Nov. 21, 2024, borrowers with uninsured mortgages will also be able to switch lenders at renewal and qualify based on market interest rates, rather than the stress tested rate.
“This is a very good thing,” says Crawford. “Borrowers will be able to qualify at the contract rate, which means they can shop around at renewal instead of just accepting whatever their current lender is offering.”
It’s important to note, however, that borrowers who are refinancing their mortgage—meaning, they want to change the terms of their mortgage contract, say, to extend the amortization period or to borrow extra money against the home’s equity—must pass the stress test again with either their current lender or a new one.
What does the stress test mean for borrowers?
The stress test reduces the size of mortgage that buyers can qualify for, says Crawford. So, unless you are able to come up with a bigger down payment to make up the difference, the test also lowers your maximum purchase price.
“The stress test was introduced to add a margin of safety to ensure borrowers could make their payments if they faced a change in circumstances—such as if interest rates go up or their income changes,” says Crawford.
In 2018, the stress test was expanded to include buyers with more than a 20% down payment (those with uninsured mortgages). Since then, all Canadian home buyers applying through a federally regulated lender—as well as those refinancing their current mortgage—have been required to pass the test.
Has the stress test changed over the years?
Yes. The stress test has evolved in a couple of ways, including changes to the qualifying rate itself, and how the rate is applied.
Until June 2021, the stress test rate was set at either 2% above the contract rate that buyers negotiated with their lender, or at the posted Bank of Canada (BoC) five-year rate, whichever was higher. However, when the BoC slashed rates at the onset of the COVID-19 pandemic, there were concerns that its five-year benchmark rate was too low to adequately protect borrowers from defaulting on their mortgages in the future.
So, the Office of the Superintendent of Financial Institutions (OSFI), a federal government agency that acts as Canada’s banking watchdog, decided to decouple the minimum qualifying stress test rate from the central bank’s rates, and instead use a set floor rate that is reviewed annually.
Another change has to do with mortgage renewals. Previously, if borrowers wanted to move their mortgage to a different federally regulated lender at renewal, they needed to “pass” the stress test again as a new applicant. In late 2023, however, the federal government eliminated that requirement on insured or high-ratio mortgages, as part of the Canadian Mortgage Charter. And as of Nov. 21, 2024, borrowers with uninsured mortgages will also be able to switch lenders at renewal and qualify based on market interest rates, rather than the stress tested rate.
“This is a very good thing,” says Crawford. “Borrowers will be able to qualify at the contract rate, which means they can shop around at renewal instead of just accepting whatever their current lender is offering.”
It’s important to note, however, that borrowers who are refinancing their mortgage—meaning, they want to change the terms of their mortgage contract, say, to extend the amortization period or to borrow extra money against the home’s equity—must pass the stress test again with either their current lender or a new one.
A report by TD economist Rishi Sondhi said sales activity hasn’t been absorbing supply fast enough, with July condo resales in the GTA down 25% from pre-pandemic levels.
Sondhi said the trend is tied to factors such as a wave of newly built condos hitting the market, elevated borrowing rates that have made it difficult for some buyers to close on their mortgages, and investors looking to sell properties as declining rents and negative cash flow make them unprofitable.
“The relatively elevated interest rate backdrop means that the gap between the rate of return from a condo in the GTA … and from a risk-free’ government bond has narrowed,” he said in the Sept. 5 report.
“This may have reduced the incentive to hold a condo as an investment, although the recent drop in yields could be helping to re-widen this spread.”
You’re 2 minutes away from getting the best mortgage rates in CanadaAnswer a few quick questions to get a personalized rate quote*You will be leaving MoneySense. Just close the tab to return.
Condo completions in the GTA
Sondhi’s report showed there were around 19,000 condo completions in the region between January and July of this year, up from about 12,000 during the same seven-month period in 2023 and 10,000 the year before.
The pace suggests this year could see “record high” condo completions in the GTA, said Brendon Cowans, a sales representative for Toronto-based brokerages Property.ca.
“You can just imagine all of this supply coming in a high interest rate environment. It’s not a lovely combination,” he said.
Active condo listings across the GTA were up 63.9% in July from the same month last year, growing from 5,416 to 8,879, according to data from real estate firm Zoocasa. The City of Toronto has seen a similar jump, with active condo listings increasing year-over-year by 61.5% in the same period.
What’s happening in other major cities?
Although the GTA leads the country in active listings gains, the trend is in line with other major cities across Canada. Year-over-year active condo listings rose more than 40% in London, Hamilton-Burlington, Mississauga and Ottawa in Ontario, as well as Vancouver. Montreal and Calgary each saw growth of about 23%.
Landsea Homes Corporation announced it has sold all of its homes at Greenfield Village in Davenport near Disney in Central Florida.
The Greenfield Village master-planned community is located just 12 miles from Walt Disney World and offers resort-style amenities like a zero-entry pool, splash pad, and playground.
Greenfield Village is comprised of 136 single-family homes ranging from 1,517 square feet to 3,198 square feet.
“Greenfield Village provided a vibrant lifestyle with vacation-like amenities while ensuring proximity to the region’s best entertainment, shopping, dining, and numerous golf courses,” said Megan Bakel, Vice President of Sales and Marketing, Florida Division, Landsea Homes. “Homebuyers were naturally drawn to the chance to own in this outstanding community, and eager to embrace Greenfield Village’s unique lifestyle. There are still other opportunities for homebuyers to own in the thriving Davenport area, with three outstanding communities currently available.”
Homes are currently available at other Davenport communities by Landsea Homes including Legacy Landings, Preservation Pointe, and Horse Creek at Crosswinds.
Landsea Homes Corporation is a publicly traded residential homebuilder based in Dallas, Texas that designs and builds best-in-class homes and sustainable master-planned communities in some of the nation’s most desirable markets. The company has developed homes and communities in New York, Boston, New Jersey, Arizona, Colorado, Florida, Texas and throughout California in Silicon Valley, Los Angeles, and OrangeCounty.
Late last year, changes to Ontario’s real estate legislation, the Trust in Real Estate Services Act (TRESA), came into effect, making open bidding legal in Ontario. (Real estate is generally regulated at a provincial level, so as of now, these changes only apply to Ontario.) It was big news at the time, but has it made a big impact? Here’s what this legislation means for buyers and sellers in the province, and how it could influence the housing market.
What is open bidding in real estate?
Open bidding in real estate is when the details of all registered offers on a property are shared openly between prospective buyers. This means that if four different offers are registered on a house, the four potential buyers can see the specifics of each competitor’s offer, including the purchase price, deposit, closing date and other terms. The name of each person making an offer is withheld, and if the purchase is contingent on the sale of another property, that information is also confidential.
Unlike a closed bidding process—often referred to as blind bidding—open bidding allows each prospective buyer to know exactly how their offer compares to the competition. It also means that they can adjust their offer based on this information (within a given timeframe). Open bidding eliminates a lot of the guesswork in making an offer on a home, and it’s intended to maximize transparency between buyers and sellers.
You’re 2 minutes away from getting the best mortgage rates in CanadaAnswer a few quick questions to get a personalized rate quote*You will be leaving MoneySense. Just close the tab to return.
What impact has open bidding had on Ontario’s housing market?
In 2022, the federal government announced that it would be implementing a Home Buyers’ Bill of Rights. One of the goals of the bill was to make housing more affordable by putting an end to blind bidding, and it appears to have influenced the changes to the TRESA. However, blind bidding has not been banned in Ontario or anywhere else in Canada at this time. Because this new legislation makes open bidding optional, not mandatory, blind bidding is still commonplace in Ontario.
“Open bidding brings more visibility to the buying process,” says Doug Vukasovic, a realtor in Toronto. That said, he isn’t seeing open bidding being used broadly yet: he’s only represented one buyer in an open bidding process, and so far none of his listing clients have opted to use open bidding. “It’s not something people are gravitating towards.”
Based on what he’s seeing in Toronto, Vukasovic doesn’t think that open bidding will have an impact on real estate prices. Changes in the market will come from interest rates, he says, noting that after a slight cool-down in some regions, the demand for houses should gradually increase as mortgage lending costs continue to ease. In other words, affordability is the bigger factor. “We need lower interest rates for people to be comfortable placing an offer,” he says.
How can sellers decide if open bidding is right for them?
Once you share the details of your listing with prospective buyers, there’s no going back—but you can change the bidding process from closed to open relatively easily. “At any point during the bidding war process, a seller can change from closed to open bids,” Vukasovic explains. “They just need to give written consent to the agent” and disclose the change to buyers.
It rarely benefits a seller to start with open bidding, Vukasovic says, but it can be helpful once several bids have been registered on the property. For example, if the top three offers on a million-dollar-plus home are within $20,000 of each other, a seller can open up the bidding process to encourage each of those prospective buyers to put in their best and final offer. In this situation, the buyers benefit from greater price transparency, and the seller wins if one of the bidders decides to increase their offer.
However, when the top two offers on a property are farther apart—say, by $100,000 or more—it’s unlikely that the seller would want prospective buyers to know that through open bidding, as the higher bidder might pull their offer to avoid overpaying for the property. This scenario is far less common than the one described above. “Someone’s got to stick their neck out a little, but paying hundreds of thousands over [the next best offer] is rare,” Vukasovic says.
But if you have some flexibility around where to live, there are cities and neighbourhoods in Canada where homes can be had for less than seven figures—lots of them, in fact. All but five of the 45 cities and regions analyzed by our partner Zoocasa in this year’s Where to Buy Real Estate in Canada report had benchmark prices below $1 million (as of the end of 2023).
See the list of Canadian cities and regions below, in order of most to least affordable (followed by neighbourhood data for Toronto and Vancouver). You can sort the data in each table by tapping on the column headers, or filter results using the last row. You can download the data to your device in Excel, CSV and PDF formats.
Canadian cities and regions with a benchmark price under $1 million
Prohibitively high prices around Greater Toronto and B.C.’s Lower Mainland can obscure the fact that the national average home price was a tad under $735,000 in 2023, according to the benchmark Zoocasa used in its analysis.
And even in the regions with benchmark prices above the $1-million threshold, the survey demonstrates there are more affordable neighbourhoods to be found. It should be noted our statistics do not differentiate between housing types, so don’t expect to find detached homes for these prices in these cities. But it’s still possible to get a toehold in the market with a condo or townhouse for less than $1 million, sometimes a lot less.
You’re 2 minutes away from getting the best mortgage rates in CanadaAnswer a few quick questions to get a personalized rate quote*You will be leaving MoneySense. Just close the tab to return.
Where to get a home for less than $1 million in Toronto
Our survey turned up no less than 106 neighbourhoods in the city of Toronto with benchmark prices below $1 million—the most affordable being Tandridge, with a benchmark price of just $484,269.
Toronto neighbourhoods
With prices like those, you might assume there’s something wrong with these neighbourhoods. Consider that a lot of them are coming up in the world. Tandridge, along with Rivalda Heights, Keelegate, Humbergate, Cook Village, Duncanwoods, Morningside, Woodbine Downs, South Steeles, Glenfield, Chapel Glen, Dorset Park, Glen Long and Mount Olive have all seen price appreciation of 50% or more over the past five years. Yorkwoods and University Village have both gone up more than 80%, and Beaumond Heights, an astonishing 113%!
Beyond those in the city of Toronto, we count an additional 65 neighbourhoods across the Greater Toronto Area where the benchmark price was below $1 million at the end of 2023.
Greater Toronto Area neighbourhoods
How much would a typical home in Toronto’s Tandridge neighbourhood cost you in monthly mortgage payments? Using a mortgage payment calculator, we find that with the minimum down payment of $24,213 and a mortgage of 25 years, you’d be looking at a monthly payment of $2,685—based on the lowest available five-year fixed mortgage rate on June 13. Add in taxes, insurance and fees, and you’d need a total of $40,706 in cash to close the deal. With 20% down ($96,854), the monthly payment would be $2,240 on a 25-year amortization.
Where to get a home for less than $1 million in Vancouver
In the city of Vancouver, which represents less than one-quarter of the Metro Vancouver population, we counted just six enclaves with benchmark prices under $1 million.
For most Canadians, using a broker is the wisest choice to save money, as they have access to a wider selection of products and should have more experience in going through the application process than you do.
However, not all brokers are made the same. Some specialize in mainstream lenders, others are more familiar with getting you a mortgage if you have impaired credit, while others tend to source mortgages for investment properties. Again, ask around, search online. Look at reviews and get referrals if you can.
What to do before signing a mortgage contract
Before signing your mortgage contract it’s worth reading the fine print, to make sure everything’s above board. Are you getting the interest rate you signed up for? What about the cost of any lender fees, like an arrangement or booking fee?
One important aspect is your “prepayment privilege,” which means how much you’re able to overpay your mortgage every month, shortening the time it takes to pay off the loan. It’s good to know where you stand, because by paying too much you can be charged a prepayment penalty, which makes paying it off faster not worth it.
Buyers should view a survey of the property before signing the contract, as this can reveal if there are any issues with the home they’d need to deal with, and could even justify a renegotiation on the price. Surveys reveal the boundary of the home, so you have an idea of where you’re allowed to build on. In Canada most sellers take out the survey, known as real property reports (RPRs), and they should be scrutinized before you sign on the dotted line.
If you’re buying a condominium—often the most affordable option in cities—you’ll want to review documents on how it’s run. Generally you join a condominium corporation where you have to pay fees which are used to manage common areas of the building, so it’s a good idea to know what you’re getting into.
In the contract you should make sure any verbal agreements are in writing. For example if the seller informally agreed to leave some furniture as part of the purchase it’s best to make this official, just in case you get a nasty surprise when you move in.
When getting a mortgage it’s important to make sure you don’t overburden yourself and have a backup plan if something goes wrong. Like, could you afford to repair a major leak if that happened? Do you have a plan of action on how you’ll be able to repay the mortgage if you lost your job? In some cases the latter issue can be mitigated by either taking out insurance, or using a guarantor when applying for a mortgage.
For more information on real estate trends and the top neighbourhoods in each region, as well as insights on the top-ranked regions nationally, return to the national page or select a region from the drop down menu.
Zoocasa is an award-winning consumer real estate search portal. It uses data and technology to deliver an intelligent, end-to-end real estate experience.
In the table below, you’ll find the best Vancouver neighbourhoods for real estate purchases. To view all the data, slide the columns right or left using your fingers or mouse. You can download the data to your device in Excel, CSV and PDF formats.
Source: Zoocasa
Top three neighbourhoods in Vancouver
The steep price tag of homes in Point Grey is justified by their extravagant features. Sprawling mansions grace expansive properties that seamlessly blend into meticulously maintained streets. In spite of a 2023 benchmark home price of $2,532,842, Point Grey has seen steady price growth in recent years. In many Vancouver neighbourhoods, the benchmark home price stalled or fell over the last year, but Point Grey’s benchmark price was 6% higher than in 2022. It was 24% higher than in 2020 and 14% higher than in 2018, earning Point Grey a value score of 3.9.
Point Grey’s housing stock is mainly luxury houses, and many of Vancouver’s premier amenities are nestled within or near this opulent community. Everything is conveniently within reach, from top-tier schools like Queen Mary Elementary, Lord Byng Secondary, Jules Quesnel Elementary and West Point Grey Academy to exceptional recreational facilities like Jericho Tennis Club, Royal Vancouver Yacht Club and Brock House. While Point Grey may seem like an exclusive gated community reserved for the elite, a mix of residents calls this neighbourhood home, including working professionals, business owners, faculty members of the University of British Columbia, artists, university students and young families. One drawback of Point Grey is its accessibility score of 1.9, which is the third-lowest in Vancouver.
One of the more expensive areas of the city, Dunbar is located near the University of British Columbia campus. It’s home to a mix of high-income people and older residents who bought in years ago. That’s why you’ll find everything from enormous mansions to small bungalows in this neighbourhood. And it’s why Dunbar had a 2023 benchmark home price of $3,044,625. However, home prices aren’t increasing as fast as those in other Vancouver neighbourhoods. The benchmark price remained unchanged last year, and it was 12% higher than in 2020 and just 7% higher than in 2018. As a result, Dunbar has a value score of 1.8. Its neighbourhood economics score of 5.0 helped propel it to the number two spot on our list.
Residents in this area love the local golf course and their easy access to the forested trails of Pacific Spirit Regional Park. Indeed, the area has a lot of parks—as well as riding stables nearby. While there are several great public schools in Dunbar, the area is known for its private schools, including Crofton House and St. George’s. Dunbar has a family feel, with many baseball diamonds and soccer fields for extracurricular activities. It’s no surprise that it has Vancouver’s highest concentration of households with children (at 51%). Because the housing stock is mostly single-family homes, Dunbar is not as accessible as other areas of the city, but it still has a decent accessibility score of 2.9 out of 5.
Killarney is perched on East Vancouver’s south-facing slope, offering a scenic view of the Fraser River. Housing costs in this area are relatively more reasonable compared to downtown, offering home buyers a balance between affordability and proximity to the city centre. But having seen significant price growth in recent years, homes here are also a great investment. Killarney’s 2023 benchmark home price was $1,677,192, which was 1% higher than in 2022, 30% higher than in 2020, and 27% higher than in 2018. That works out to a value score of 4.4.
As one of the newer neighbourhoods in Vancouver, Killarney radiates a stronger connection to nature and a distinct lack of congestion. However, it falls short in terms of accessibility, earning a neighbourhood accessibility score of only 0.7. Known for its tranquility, Killarney features small shopping plazas and residential cul-de-sacs. With four public schools, including the notable Killarney Secondary—the largest secondary school in Vancouver—the neighbourhood has a large number of households with children (47%).
What’s happened in the Vancouver real estate market?
In 2013, Vancouver home prices followed a trajectory similar to those in other markets; the benchmark price continuously climbed until it reached a peak of $1,210,700 in July, and then it gradually declined, finishing the year at $1,168,700. Despite higher borrowing costs last year, the Vancouver real estate market still experienced price growth, with the benchmark price rising by about 5% from January to December. Most of this price growth occurred in the first half of the year, driven by an exceptionally limited supply of homes.
Demand for the more affordable home types stalled, while the luxury market saw less of a slowdown. “The price of luxury homes went up quite a bit last year,” says Geoff Pershick, a local eXp real estate agent. (Zoocasa, the author of this study, is wholly owned by eXp World Holdings.) “More homes sold for more money than expected, and it speaks to the influx of capital that is coming to the area.”
High interest rates deterred many sellers from listing last year and prompted many buyers, including cash buyers, to postpone their purchases. But better conditions are already emerging for 2024.
“The global wealth shift is ushering in an increasingly diverse group of buyers to Vancouver,” says Pershick. “Last year’s uncertainties might have slowed down [real estate] activity, but with interest rates finding their footing and a sense of stability returning, I’m expecting a resurgence of cash buyers.”
You’re 2 minutes away from getting the best mortgage rates in CanadaAnswer a few quick questions to get a personalized rate quote*You will be leaving MoneySense. Just close the tab to return.
What’s next for real estate in Vancouver?
The number of Vancouver home sales was up about 6% month-over-month in January, and up about 45% month-over-month in February, according to Greater Vancouver Realtors. If this momentum continues, the Vancouver real estate market is poised to have a stronger year in 2024 than in 2023.
“As interest rates decline, we’re going to see a surge in buyers alongside a decrease in sellers within the Vancouver market,” says Pershick. “This imbalance will drive property prices up and shape a competitive landscape for potential home buyers.”
Though buyer sentiment is improving from 2023, the supply of Vancouver homes has remained scarce since last year, pushing the market further into seller’s territory. “Greater Vancouver is consistently grappling with supply challenges, and I don’t think that will change in 2024,” says Pershick.
Between December and January, the benchmark home prices in Port Coquitlam and Coquitlam increased by about 3% and 2%, respectively. In Port Moody, the benchmark home price dipped by about 1%, but home prices will likely climb as the spring market kicks off.
You’re 2 minutes away from getting the best mortgage rates in CanadaAnswer a few quick questions to get a personalized rate quote*You will be leaving MoneySense. Just close the tab to return.
Burnaby, New Westminster and Richmond, B.C.
The city of Vancouver is bordered by Richmond to the south, and by Burnaby and New Westminster to the east. Burnaby and Richmond are B.C.’s third- and fourth-largest cities, respectively, each with a population above 200,000.
Best places to buy real estate in Burnaby, New Westminster and Richmond
In the table below, you’ll find the top neighbourhoods for real estate purchases in Burnaby, New Westminster and Richmond. To view all the data, slide the columns right or left using your fingers or mouse. You can download the data to your device in Excel, CSV and PDF formats.
Source: Zoocasa
Top three neighbourhoods in Burnaby, New Westminster and Richmond
Situated in Richmond, Hamilton is just north of Annacis Island and the Annacis Channel, and west of Queensborough. Hamilton’s 2023 benchmark home price was $947,750 as a result of a consistent and stable increase in property values. The benchmark was 3% higher than in 2022, 37% higher than in 2020, and 22% higher than in 2018. This trend contributes to Hamilton’s impressive value score of 4.6.
Hamilton is a distinctive neighbourhood with a blend of residential properties, predominantly single-family homes, alongside businesses and recreational facilities. It offers various amenities such as the Hamilton Community Centre, Hamilton Highway Off-Leash Dog Park, and the Bridges Marina. The neighbourhood boasts several parks, including the well-kept and popular Hamilton Community Park. Locals appreciate the trails that lead to the waterfront, a popular spot for dogs to take a swim. Hamilton has the highest percentage of households with children (57%) in this part of Metro Vancouver, by a significant margin. Families can send their kids to Hamilton Elementary School, the Choice School for Gifted Children, or Queen Elizabeth Elementary School. However, Hamilton has the third-worst accessibility score among the three cities, at 0.3.
In the southwest corner of Richmond lies the historic community of Steveston, where the powerful Fraser River meets the Pacific Ocean. Steveston is bordered by Williams Road to the north, the Fraser River to the south, No 2 Road to the east, and the Strait of Georgia to the west. The neighbourhood’s 2023 benchmark home price was $1,529,183, considerably higher than those of surrounding neighbourhoods. Home prices in Steveston Village have been on a slight upward trajectory. The benchmark home price was 1% lower than in 2022, but 28% higher than in 2020 and 17% higher than in 2018. As a result, Steveston has a modest value score of 2.0. However, it has by far the highest neighbourhood economics score in the region (5.0), which helped push it to the top.
So, what brings buyers to this neighbourhood? Following the closure of the fish canneries, significant residential development has transformed the area, with the emergence of new luxurious condominiums and townhomes reshaping the landscape. Residents benefit from outstanding local dining options, unique boutiques, a picturesque boardwalk that is popular among both tourists and locals, beach access, parks, playgrounds and biking trails—all enhancing Steveston’s charm. While primarily residential, Steveston has several parks near schools like Diefenbaker and James McKinney Elementary, along with the expansive Manoah Steves Neighbourhood School Park, which features four sports fields, three ball diamonds and a playground. The neighbourhood has one of the highest concentrations of households with children (49%).
Nestled in North Burnaby, the Brentwood Park neighbourhood has traditionally offered a balanced mix of affordable single-family detached homes and condominiums. With The Amazing Brentwood housing spectacular developments, Brentwood Park is poised to become one of the largest urban destinations in North America. In 2023, the neighbourhood’s benchmark home price stood at $881,425. Home prices in Brentwood Park haven’t risen as rapidly as those in other neighbourhoods on our list. The 2023 benchmark price was 1% lower than in 2022, 18% higher than in 2020, and 11% higher than in 2018. This translates to a value score of 3.2. But Brentwood Park has one of the highest neighbourhood economics scores, 3.1, in this part of Metro Vancouver, behind only Steveston.
The neighbourhood boasts stunning views of Burnaby Mountain and the North Shore Mountains. Beecher Park offers forested areas, a sports field, a children’s playground and Beecher Creek, a local salmon spawning habitat connecting to Still Creek. Eileen Dailly Leisure Pool & Fitness Centre is well known for its swimming pool, children’s water play area, sauna and steam room, weight room, and more. The area is also home to the McGill Branch of the Burnaby Public Library. Public schools in Brentwood include Brentwood Park Elementary, for kindergarten to grade seven, and Alpha Secondary School, which offers an advanced placement program allowing students to take college-level courses while still in high school.
What happened in the real estate markets of Burnaby, New Westminster and Richmond?
Real estate activity was stable in all three cities last year, and there was much less fervour compared to previous years. Home prices experienced modest price growth from January to December 2023, though this was due more to tight competition than increased demand.
Burnaby East experienced the most price growth, with the benchmark price rising about 7% from January to December. But the area is also the most expensive, with a December benchmark price of $1,157,400. New Westminster had the most affordable homes, with a benchmark home price of $815,600 in December, up about 4% from the beginning of the year. In Richmond, the benchmark home price rose from $1,109,200 in January to $1,153,400 in December—an increase of about 4%.
“Interest rates played a pivotal role in shaping affordability [in these areas], and there was a noticeable withdrawal from the market among potential buyers,” says Pershick. For the three cities combined, total home sales across all property types in 2023 came in below 2022 levels.
What’s next for real estate in Burnaby, New Westminster and Richmond?
Between December 2023 and February 2024, benchmark home prices in all three cities inched upward, suggesting a stronger start to the year than in 2023. Of the three, Richmond’s benchmark price increased the most, rising about 2% to $1,173,100 in February. Burnaby South has also experienced a decent increase, with the benchmark price rising by about 2% to $1,113,500 over the same period.
As of February, year-to-date sales for detached properties in Burnaby and Richmond are up compared to 2023. However, it’s Burnaby condo apartments that have gotten the most attention, with year-to-date sales up by about 19%.
Nestled in Markham, Vinegar Hill is encompassed by Highway 7 to the north, Highway 407 to the south, and streets situated just west and east of Main Street South, with the Rouge River serving as its natural border. The neighbourhood is a sought-after residential destination known for its picturesque settings and historical charm. In 2023, its benchmark home price was $1,126,400—which was 44% higher than in 2022, 72% higher than in 2020, and 40% higher than in 2018.
The community’s name is thought to have connections to either a cider mill located on the east side of the river valley or barrel makers who filled their barrels with vinegar to assess their straightness as they rolled down Markham Road. Slightly more than half (53%) of households in the area have children. Despite its desirability, Vinegar Hill has a relatively low accessibility score of 1.8—which is still higher than the other two top neighbourhoods in York.
Located in the northeast part of King Township, Pottageville stands out for its distinctive topography and environmental importance. It’s situated atop the elevated ridges of the Oak Ridges Moraine and within the Ontario Greenbelt corridor, and it features an abundance of ranch-style bungalows and older homes. Coming in second among our top three neighbourhoods in York, Pottageville had a benchmark home price of $1,657,917 in 2023, and a value score of 3.3. The benchmark price was 55% higher than in 2022, 27% higher than in 2020, and 113% higher than in 2018. With above-average levels of household income, education and home ownership, Pottageville has a perfect neighbourhood economics score.
It also has an above-average number of families with children, representing 56% of households. With easy access to the Greenbelt Route, a province-wide bike trail, it’s the perfect area for bikers. Pottageville may only have a general store, a gas station and a few small businesses, but there’s ample recreational space centred around Pottageville Community Park, which features a playground, a baseball diamond, tennis courts and soccer fields. There’s a train station a 10-minute drive away, making it easy to commute to Toronto, but the neighbourhood still only has an accessibility score of 0.4.
Concord benefits from excellent commuter highway access, with both Highway 407 and Highway 7 passing through. In 2023, Concord’s benchmark home price was $742,158, which was 2% lower than in 2022, but 9% higher than in 2020 and 54% higher than in 2018. The area has the second-highest value score (3.6) of our top three York neighbourhoods, and it does well on neighbourhood economics as well, scoring 4.6.
Concord residents often spend their time enjoying recreational and leisure activities. One popular destination is Vaughan Mills shopping centre, with its many retail stores, entertainment options and family-friendly attractions. Locals can also explore Concord’s natural beauty while visiting Boyd Conservation Area or Black Creek Pioneer Village. Many families live in modest brick detached homes and townhomes with single-car garages, which are popular in the area.
What happened in the York Region real estate market?
In 2023, York Region’s home prices fell less than those in other regions of the GTA. In January, the benchmark home price was $1,285,583, and by December, it had dropped 0.4% to $1,281,020. But with mortgage rates as high as they were last year, the market was never able to gain much momentum.
“Last year, as banks tightened their borrowing criteria, we saw a decrease in sales while average prices remained relatively flat or decreased just a little,” says Kirby Chan, a local eXp real estate agent. “It was tough,” he says, because even though prices came down a bit, interest rates were so high that mortgage affordability suffered.
Buyer uncertainty played a big role in slowing down home sales, as many people were hesitant to enter the market amid the anticipation of rising interest rates. The number of home sales in York stayed above 1,000 during the spring and summer, but trickled off in July. In December, there were only 612 sales.
What’s next for real estate in York Region?
January started off with a boost in home sales, suggesting the market is rebounding. Home sales were up about 27% from December and about 42% from January 2023.
“Buyers are coming out now into the market, and there’s a positive outlook on how the market is going to look this year,” says Chan. “But if buyers wait until interest rates come down, then prices will go up and their buying power will go down.”
York Region buyers could face more competition than last year, as would-be Toronto buyers are attracted by the area’s comparable affordability. “With the city of Toronto increasing property taxes soon, I think there’s a good possibility this will drive more buyers into York Region and areas like Markham, Richmond Hill and Vaughan,” says Chan.
Assuming mortgage rates go down and buyer confidence returns, Chan expects this year to be a strong one for York Region real estate. “Sales-wise and price-wise, I think we’re going to have a record year in 2024. Last year, the government raised interest rates to cool everything down, and so there were fewer sales. That means there’s a lot of buyers out there waiting, and this pent-up demand is going to push prices even higher.”
In the table below, you’ll find the top Halifax neighbourhoods for real estate purchases. To view all the data, slide the columns right or left using your fingers or mouse. You can download the data to your device in Excel, CSV and PDF formats.
Source: Zoocasa
Top three neighbourhoods in Halifax
For the second consecutive year, Cole Harbour is the top place to buy a home in HRM. Located east of Dartmouth, Cole Harbour is named after a local harbour. It has easy access to Highway 107 and Highway 111, making it an attractive location. Cole Harbour’s 2023 benchmark home price was $505,774, and that’s the result of consistent price growth in recent years. The benchmark price was 13% higher than in 2022, 66% higher than in 2020, and 69% higher than in 2018, giving Cole Harbour a value score of 4.0. It also has a neighbourhood economics score of 4.3, the third-highest in HRM.
The area has several schools—a convenience for the above-average 47% of households with kids. Residents love the area’s beaches and trails, including the Salt Marsh Trail and Rainbow Haven Beach Provincial Park. Cole Harbour is also a popular tourist destination: the quaint Cole Harbour Heritage Farm Museum and Fisherman’s Cove are two must-see stops. However, with the neighbourhood’s accessibility score of 0.6, you’ll likely need a car to get around.
View Cole Harbour real estate listings on Zoocasa.
Situated on the Eastern Shore of HRM near the Shearwater Canadian Air Force base, Woodside-Eastern Passage is a popular destination for military families due to its mid-sized community feel. Boasting a dozen eateries, convenient access to Halifax through the Woodside Ferry, the main Nova Scotia Community College campus and abundant character, this emerging neighbourhood proves to be a smart investment and a delightful place to live. Woodside-Eastern Passage’s benchmark home price was $432,486 in 2023, which was 18% higher than in 2022, 64% higher than in 2020, and 97% higher than in 2018. It’s the only neighbourhood in HRM with a perfect value score of 5.0.
The area features multiple recent subdivisions that provide a variety of housing options, including semi-detached and detached homes. There are many elementary, junior high and high schools that cater to the 45% of households with children. Like most places in HRM, you’ll likely need a car to live here, though.
Located a mere 10 minutes from the airport and 30 minutes from downtown Halifax, the Waverly-Fall River-Beaver Bank area is renowned for its scenic landscape, featuring numerous lakes, expansive open spaces and generously sized lots. It also has the most expensive homes of the top three neighbourhoods on our list, with a 2023 benchmark price of $666,815. That was 8% higher than in 2022, 62% higher than in 2020, and 83% higher than in 2018. Notably, Waverly-Fall River-Beaver Bank has the second-highest economics score on our HRM neighbourhoods list.
All homes in this area use septic systems; some rely on wells for water, while others are connected to city water. Residential lots are spacious and feature a range of traditional-style homes. Many residences boast lake access, and some even enjoy a lakefront setting. The neighbourhood has many sought-after schools. While the area may have limited amenities, it boasts a well-established canoe and kayak club, multiple daycare facilities, a post office and a convenience store. Living in Waverly-Fall River-Beaver Bank may necessitate owning a car, given its accessibility score of 0.1.
What’s happened in the Halifax real estate market?
Unlike the ups and downs of 2022, Halifax real estate prices did not sharply increase or decrease in 2023. The benchmark price consistently rose from January through the end of the spring market and reached a late peak of $530,900 in August. Following this, home prices softened before experiencing a modest rise in December, settling at a benchmark price of $511,600.
“In the first quarter of 2023, prices and sales were up, but then the market really slowed down after the spring,” says local eXp real estate agent Richard Payne. (Zoocasa, the author of this study, is wholly owned by eXp World Holdings.) “Properties were lingering on the market longer, and we didn’t see multiple offers on a home anymore. By the second half of the year, buyers had shifted to a more cautious stance, preferring to wait on the fence to see how conditions would evolve.”
As interest rates rose in the summer, buyers experienced some frustration, which morphed into confusion about what to expect from the market, says Payne. “Once buyers got confused, they didn’t feel confident to make any decisions, and this contributed to the slowdown in market activity.”
The uncertainty also influenced buyers’ budgets. “A lack of affordable options, especially in the $400,000 to $600,000 range, pushed many buyers to look out of the core and into more of the suburbs,” says Payne. “Homes in that range were getting more attention as interest rates rose.”
You’re 2 minutes away from getting the best mortgage rates in CanadaAnswer a few quick questions to get a personalized rate quote*You will be leaving MoneySense. Just close the tab to return.
What’s next for real estate in Halifax?
The benchmark home price in Halifax has increased by a little more than 1% since December, reaching $518,500 in January. With demand expected to rebound, price growth will likely continue, though that will depend on the mortgage rate outlook.
Payne expects the opposite of 2023 to unfold in 2024—with a quiet start to the real estate market, followed by an active second half. “In the beginning of 2023, activity was fairly up, and then as interest rate hikes were announced, it put the brakes on momentum,” he says. “This year, I anticipate a surge in activity in the second half of the year as buyers catch on to falling interest rates and rush back into the market.”
Buyers who were sitting on the sidelines last year may be better positioned to join the market in 2024. An influx in buyer activity might also encourage more sellers to list their homes, leading to a much-needed bump in the number of homes on the market.
17. 2011: Google released Google Wallet in the U.S., three years before Apple Pay even popped up on our iPhones. Over the next decade, Google tested many versions of the app—and even launched a second one, named Google Pay (which was intended to replace Google Wallet). In February 2024, the company said it would end Google Pay in the U.S.—and replace it with Google Wallet. In its current iteration, Google Wallet serves as a comprehensive digital wallet that can store payment and loyalty cards, transit and event tickets, proof of COVID vaccination and even digital car keys.
18. 2014: Scotiabank renamed ING Direct Canada, which it acquired two years earlier, as Tangerine. ING Direct was Canada’s first branchless bank and one of the first institutions to offer a no-fee high-interest savings account (HISA). Today, under its new name, Canada’s first online-only bank continues to offer favourable rates and low fees.
19. 2014: ShareOwner Investments was the first robo-advisor to operate in Canada—by a matter of months. At the start, the portfolio management platform allowed Canadian investors to pick one of five model portfolios or to create their own from a list of around 50 ETFs. Over the next few years, robo-advisors gained popularity among investors, as more startups cropped up, Wealthsimple acquired ShareOwner Investments, and BMO became the first major Canadian bank with its own robo service, SmartFolio.
20. 2015: Following devastating floods in Alberta, home insurance providers Aviva Canada, The Co-operators, RSA Canada and 13 others offered overland flood insurance, which never existed before. Previously, insurers generally only offered sewer backup coverage, which protects against another type of water damage.
Image by Freepik
21. 2016: BMO was the first bank to offer biometric identification for corporate credit card users. With this technology, customers could complete online payments with a “selfie” or fingerprint check. On the mobile banking side, a new version of the Tangerine app incorporated biometric technologies like EyeVerify (for eyeprint ID technology) and VocalPassword (for voice authentication).
22. 2017: Toronto-based PayBright was the first company to offer a buy now, pay later option to Canadians. The service, offered at online check-outs, allows shoppers to pay for routine purchases—everything from clothing and makeup to flights—through installments. Many similar companies now operate in Canada, including Affirm (which acquired PayBright in 2021), Sezzle and Afterpay. Some large banks have also created installment payment products and credit card features, including CIBC (with Pace It) and Scotiabank (with SelectPay).
23. 2019: RBC made NOMI Budgets available through the RBC mobile banking app. NOMI Budgets, which the bank described as the first of its kind in Canada, uses artificial intelligence (AI) to proactively analyze a customer’s spending history, make budget recommendations and send timely updates.
24. 2022: OpenAI released ChatGPT, a generative AI chatbot. Within two months, it had an estimated 100 million monthly active users, making it the fastest-growing consumer application in history. The new tech has myriad potential applications in finance, including performance measurement and forecasting, data analytics, customer service, and real-time calculations and advice.
What are your options if you find yourself in this situation? Let’s look at the intricacies of buying a pre-construction home in Canada, why some buyers are having difficulty closing on their purchases, and steps you can take to avoid losing a large deposit.
You’re 2 minutes away from getting the best mortgage rates in CanadaAnswer a few quick questions to get a personalized rate quote*You will be leaving MoneySense. Just close the tab to return.
How does buying a pre-construction home work in Canada?
Generally, pre-construction homes offer several key benefits. For one, the property is brand new. Unlike with a resale home, you can customize a new home right down to the finishes and countertops. And because the home is new, you can expect to spend a lot less on repairs and maintenance.
New homes also give you more time to save. With resale homes, you typically must pay the deposit and down payment within a 30-to-90-day timespan. With new homes, the deposit can often be spread over several months or years.
In case you’re new to buying pre-construction homes in Canada or you’d like a refresher, here are some important details to be aware of.
Payment schedule for pre-construction homes
Unlike a resale home when you usually pay the deposit within 24 hours of your offer being accepted, with a pre-construction home there’s typically a deposit payment schedule.
With a pre-construction home, you’re usually expected to have a down payment of between 20% and 25%. This may sound like a lot at first, but the amounts are spread over several months and years. For example, you may be asked to make a deposit of $3,000 at the time of making an offer, followed by 5% within 30 days of the offer, 5% within 90 days, 5% within 180 days and a final 5% at the time of occupancy.
Oftentimes, the deposit structure is up for negotiation. If the builder’s payment schedule doesn’t work for you, you should try to negotiate one that does.
Mortgage rules for pre-construction homes
In Canada, mortgage rules are the same for a new home as a resale home. For example, you’re required to pass the mortgage stress test in both cases. However, a key difference is timing. With a new home, you don’t know what mortgage rates will be when the property closes. Mortgage rates could be the same, or they could be higher or lower. This adds uncertainty. Without knowing what mortgage rates will be, you actually don’t know if you’ll be able to afford the property in the future.
There’s also the issue of the property value for mortgage lending purposes. Lenders don’t sign off on the mortgage for a pre-construction home until the time of closing. You make an offer without financing, then hope to get financing at the time of closing.
Fortunately, there are a number of ways to save for a down payment on your first home, including the first home savings account (FHSA). This registered account was introduced in April 2023 to help first-time home buyers in Canada. And it can be used in conjunction with other government programs including the Home Buyers’ Plan, First Time Home Buyer Incentive and Home Buyers’ Tax Credit. The FHSA has an annual contribution limit of $8,000, up to a lifetime maximum of $40,000, and the account can stay open for 15 years. Cash and investments held inside an FHSA can grow tax-free, and there’s no tax on FHSA qualified withdrawals.
FHSAs can hold a wide variety of investments, just like with other registered accounts. How your FHSA’s investment portfolio is structured should reflect your personal goals, timeline, financial circumstances and risk tolerance. These factors are likely to change over time, which means your investment strategy should change, too. Here’s why that is and how to plan your investments accordingly—plus, when you should open an FHSA.
What types of investments can an FHSA hold?
Like a tax-free savings account (TFSA) or other registered investment accounts, your FHSA gives you options. You can put cash into the account on a regular basis and earn a bit of interest over time, but if you want to potentially grow your money and keep pace with inflation, there are other options to consider. Here’s a quick overview. For personalized advice, speak to a financial advisor. Note that because an FHSA is a registered account, any capital losses can’t be claimed against capital gains.
Stocks/equities: Stocks, also called equities, represent part ownership in a company. Stocks are traded on stock exchanges.Some companies distribute part of their profits to shareholders in the form of dividends (typically monthly, quarterly or annually). You may also earn capital gains or have capital losses on your stocks at the end of the year.
Mutual funds: Mutual funds are pooled investments that hold a portfolio of securities, such as stocks or bonds. Depending on the securities they hold, mutual funds can earn interest, dividends or capital gains. They can be bought from qualified advisors, brokerage firms and fund companies.
ETFs: Exchange-traded funds are similar to mutual funds in that they’re pooled investments that hold a portfolio of securities. Unlike mutual funds, ETFs are bought and sold on a stock exchange.
Bonds: A government or corporate bond will receive a fixed interest rate for a predetermined period of time, making it a reliable, low-risk investment choice. Your capital is returned when the bond matures at the end of the specified time period, and you’ll earn interest, capital gains or both. Bonds are also sellable on the bond market, which is great for liquidity, but that means a bond’s value can change.
GICs: Guaranteed investment certificates are another low-risk option. Similar to a bond, a GIC is an investment asset with a fixed interest rate and specified maturation date. It’s predictable and, because there’s an end date involved, it’s easy to plan around. And you can even ladder your GICs to buy varying terms and reinvest the growth.
Adjusting your FHSA investments over time
Similar to when you invest in a registered retirement savings plan (RRSP), a registered education savings plan (RESP) or a TFSA, you can review the makeup of your FHSA as needed. You can make changes that reflect your current goals and financial situation.
For example, if you’re hoping to purchase your first home within five years or less, you may want to be fairly conservative with your investments (choosing bonds, GICs, and conservative ETFs and mutual funds, for example). A tight timeline leaves less tolerance for market fluctuations.
On the other hand, if your plan is to buy a home in seven to 10 years’ time or longer, you could consider choosing higher-risk (and potentially higher-reward) investments at first. Over time, and as you approach your savings goal, you could shift your asset allocation towards lower-risk investments. That said, it’s best to stay within your personal comfort zone—if your investment portfolio is keeping you up at night, your asset mix may not be the right fit for your risk tolerance.
One way to reduce risk is through diversification. For example, Fidelity Investments offers All-in-One ETFs that provide exposure to a variety of assets in one investment. This can carry lower risk than holding a handful of individual stocks. You can choose from different asset allocations. A more conservative investor may choose a higher allocation to fixed income, like in Fidelity’s All-in-One Conservative ETF (ticker symbol FCNS). Someone with a higher risk tolerance (or a longer savings timeline) may want all equity, like in Fidelity’s All-in-One Equity ETF (FEQT). The approach is up to you. (Read more about Fidelity’s All-in-One ETFs.)
Where (and when) to open an FHSA
The FHSA is available through Fidelity Investments and other financial institutions. To qualify, you must be a first-time home buyer in Canada who is at least 18 years old but not older than 71.
Loan,Contract and residential investment concept. Contract of loan and estate agreement for investor … [+] or buyer to sign for getting approval form the bank.
getty
As a homeowner, there’s no doubt that you’ve lovingly maintained the home – both for yourself and as you considered resale value. And now that you’re about to actually sell the home, it’s understandable that you want to be compensated for your efforts. Your home also holds a lot of memories– and if you’re not careful, you’ll end up projecting your sentimental value into the home’s selling price. That’s why you need to check your feelings at the door when you put your home on the market.
According to broker Kimberly Jay at Compass in New York, NY, positive memories and sentimental value may lead to sellers overpricing their homes. “Buyers do not have the history or connection you do, and likely do not feel the same way about your home.” She says you can take your memories with you, but warns against pricing your experiences into the listing price.
And even if you’ve made changes and upgrades, the house may not be worth as much as you think. “Sellers seem to think that their home is the most beautiful of all – and they’ve lived in it for years, and it is beautiful to them,” explains broker Dorothy Schrager of Coldwell Banker Warburg in New York, NY.
But everyone has different tastes, and buyers may not necessarily value the same features. “It’s important to think about your home in a less personal way: you need to start thinking of it as an asset that you are selling, and you must take your personal feelings out of the picture, because it’s a business deal,” Schrager says.
These are some of the dangers of overpricing your home.
It May Languish on the Market
“Overpricing a home can result in it staying on the market much longer than it should before acquiring an offer,” warns Patrick Garrett, broker/owner at H & H Realty in Trussville, AL. You may be thinking, “Well, I know what my home is worth, and I’m willing to wait on the right buyer.” But that’s not usually how the market works.
According to Vickey Barron, a realtor at Compass in New York, NY, the most effective time to sell a home is when it is first listed on the market. “If the home is overpriced, it will deter people from coming for those impactful initial showings,” she explains, adding that there is never a market for overpriced homes.
It’s a view shared by agent Jane Katz of Coldwell Banker Warburg in New York, NY, who warns that overpricing and aspirational pricing are never good strategies. “As a new listing, the seller has a small window of time which can be considered the honeymoon period for the listing, and during this time, all eyes are on the listing, and it captures the most attention and excitement.”
It’s a Waste of Time
And here’s another reason to avoid jacking up the price of your house. “Overpricing a home is usually a waste of time and resources for the listing agent and the home seller,” says Garrett. Selling your home requires a lot of prep work, which can range from marketing to open houses and showings, not to mention having to keep your home meticulously clean, and leave the house when potential buyers arrive, etc. However, you’re doing all of this in vain if no one is seriously interested in the home.
In fact, Christy Walker, broker/owner at RE/MAX Signature in Phoenix, AZ, tells us it’s an industry joke that sellers see their home as a million-dollar mansion while the appraiser sees it as upper middle class and the buyer sees it as a fixer upper. “Perspective plays a huge role in what a buyer is willing to pay, and with rising interest rates, most buyers are getting savvy enough to compete for the homes that are worth it to them, but to pass on anything overpriced just because a seller thinks they can get top dollar in this market.”
You’ll Lose Potential Buyers
As a general rule, overpricing your home may lead to buyers not even considering it. Walker says that pricing on the high side should only be considered – even in a strong seller’s market – when the seller is willing to be patient with the days on market it may take to sell. (And she notes that the home should be in pristine condition and staged appropriately.) “However, this method should only be used when there is very little direct competition, or the home is fairly unique.”
But Walker admits that pricing high will probably eliminate many buyers. For example, buyers who search for homes in a particular price range won’t even see it, because the house is outside of their price parameters.
“Also, it may remove qualified buyers from competing for the home because it is already priced on the high side of their budget.” In addition, Walker says some buyers will assume that in a multiple offer scenario, they would need to bid more. “So, they don’t even bother if the home is already at the very top of their price range.”
You may be thinking that you can overprice the home, and then the price will be negotiated down. But this doesn’t always happen. According to Katz, if the buyer’s offer number and your asking price are too far apart, they won’t even make an offer.
The Appraisal Won’t Back You Up
Let’s say you overpriced the home and someone wants to purchase it. Whoo-hoo . . . but don’t pop the cork on that champagne too soon. “Be advised that the property may not appraise at the listed value – even if a buyer puts in an offer at the overpriced amount,” warns Garrett. So, if your asking price is $500,000 and your home only appraises for $450,000, the buyer’s lender is only going to loan them $450,00, they would need to come up with the additional $50,000 on their own.
“From the mortgage perspective, it is important to make sure that your sales price is reflective of and supported by comps in the neighborhood for previously sold and closed listings,” says Sarah Alvarez, regional vice president of mortgage banking at William Raveis Mortgage in New York, NY.
And even if your next-door neighbor listed their home at an aspirational price does not mean that all of a sudden, the value of your home shot up overnight. Alvarez says that once the neighbor’s house is a recorded sale, it will be a much more realistic and accurate price.
There’s a reason why selling your home is so different from other types of business transactions. Agent Kate Wollman-Mahan of Coldwell Banker Warburg in New York, NY, tells us that most sellers are unwitting victims of what psychologists call the Endowment Effect. “This means they tend to overvalue their own home simply because the home belongs to them,” she explains. “An identical home down the block would, to these sellers, be worth less.” So, make sure that the Endowment Effect doesn’t cloud your thinking when pricing your home.
Buyers are Wary
It’s not only the price of an overpriced home that turns buyers off. There’s also another negative component that kicks in. “After a property has been on the market for an extended period, it may become stigmatized due to the perception of potential buyers thinking something is wrong with it,” warns Garrett.
Katz agrees, and says if your listing just sits there and accumulates days on the market, it will not be a good look. “Buyers will begin to think something’s wrong with the home, and the listing won’t be considered ‘hot’ or desirable, even if it’s a great property – and to quote Barbara Corcoran, ‘Nobody wants what nobody wants.’” It’s also interesting to note that buyers won’t necessarily ask anyone what’s wrong with the home. They’ll just assume that something is indeed wrong, and will skip over the property and view more recent listings.
The Home May Sell for Less
And finally, as a result of pricing your home too high, and being on the market for too long, Garrett says it may lead to a self-defeating conclusion. “The seller risks having to accept less than market value if the property stays at the overpriced list amount for an extended period,” he says. Note that he didn’t say, “less than you wanted.” No, the desire to overprice the home could lead to it being sold for less than market value.
In Summary: Don’t Risk It
Admittedly, pricing your home can be an emotional decision, but don’t give in to that emotional pull. “While your home certainly has unique features that may well give it a boost in value, ultimately it is a commodity,” says Bret Ceren, realtor at Platinum Living Realty in Scottsdale, AZ. As such, he says it will only sell for what the market will bear. “A good agent can help get a premium if it is well-marketed and they negotiate strongly on your behalf, but memories made in the home are not taken into consideration at all by the marketplace – and all of those beautiful features may not make a difference either.”
In addition, buyers have become savvier. “They have access to so much information, and they know what range the listing price should be,” explains agent Dorothy Salisbury at Coldwell Banker Warburg in New York, NY. When you are preparing to list your home, she says you have one chance to launch it and price it right. “If it is priced correctly, you will get an offer or even multiple offers, but if you overprice your home, the market will tell you by lack of showings.” And at that point, your home has lost momentum and you can end up in a precarious position.
The numbers: Construction on new American homes jumped 21.7% in May, as homebuilders ramp up building single-family homes to meet strong demand from buyers.
Housing starts rose to a 1.63 million annual pace last month from 1.34 million in April, the government said Tuesday. That’s how many houses would be built over an entire year if construction took place at the same rate in every month as it did in May.
Economists were expecting a slight decline of about 0.8%. The numbers are seasonally adjusted.
This is the second month in a row that starts are up. The pace of construction was the highest since last April, when starts hit a 1.8 million pace.
The surge in construction this spring was led by the Midwest.
Both single and multi-family construction rose in May. Keen interest from would-be home buyers is creating strong demand for new homes. These buyers continue to face a lack of options in the resale market.
Building permits, a sign of future construction, rose 5.2% to a 1.49 million rate.
Key details: As the weather warms up, construction pace has picked up considerably.
The construction pace of single-family homes rose 18.5% in May while apartment building rose 28.1%.
Home builders were most active in the Midwest, where housing starts rose by 67% from the previous month. The Midwest also led the nation in terms of single-family construction.
Permits for single-family homes rose 5.2% in May while permits in buildings with at five units or more rose 7.8%.
Housing starts are up on an annual basis for the first time in nearly a year. The annual rate of total housing starts rose 5.7% from last May.
Big picture: New construction is a bright spot in an otherwise despondent housing market. For the buyers who brave 6% mortgage rates, there are few options in the resale market, which continues to funnel demand for new homes.
Builders also reported that they were feeling upbeat about the housing market for the first time in nearly a year.
What are they saying? “To say that we did not see this one coming would not even come close to capturing the degree to which the May residential construction data caught us off guard,” Richard Moody, senior vice president and chief economist at Regions Financial Corporation, wrote in a note.
“This is without question an exaggeration of the underlying reality and a reminder that the housing starts data are among the most volatile and random of the government’s major economic indicators,” Stephen Stanley, chief U.S. economist at Santander U.S. Capital Markets, wrote in a note.
“Having said that,” he added, “the housing sector broadly appears to be healing remarkably fast after enduring a historic shock in affordability last year, when 30-year mortgage rates more than doubled.”
