Are There Still Bidding Wars?

Are there still bidding wars?

Well, considering I’m preparing an offer on a property that has 5 offers today, the easy answer is ‘yes’!
However, it’s worth pointing out, the term “bidding wars” is often thrown around with a lack of understanding.
Multiple offers or competing offers are probably more accurate descriptors.
I think the term “bidding wars” leaves the consumer with the impression that there may be a back and forth between buyers who essentially out-duel one another with bids until the winner prevails! Not quite exactly how it goes, but let’s have look at the market in front of us, and I can explain what has changed and what has stayed the same.

I have been selling real estate in Guelph for 15 years now – wow, it sounds long even saying it! Although I look at the year between 2016 and 2017 as the most aggressive seller’s market I have seen in that time…

There have always been multiple offers.

If something was priced right, people bid. Simple as that. The difference was just how far people pushed. During my second year in real estate I was on the unsuccessful end of 27 multiple offer scenarios. What happened? Was I just not any good at what I was doing? No, I do not believe that to be the case. Rather I perhaps had an unrealistic approach to the growth patterns of real estate and failed to realize that real estate always makes us looks silly. What looks expensive one year looks like a great deal the next year.

There is a conditioning we go through with anything which holds any value.
For example cars, houses, vacations etc. where it takes time to get used to what something costs now, but then we readjust and have an easier time paying for it.

My father was in the parking lot business – yes, paid parking lots in Toronto. He rented pieces of land and operated them as public parking lots. I worked for him every summer, and this was my first lesson in “supply and demand”. As the parking lot filled, the prices would change. I can still remember the look on the first customer’s faces that drove in when I had turned the sign to a make-shift $20. That seems to be a bargain now.

So why have there been “bidding wars”, as people loosely call them, for all this time?

Well frankly we just have never had enough supply and the city’s population has been growing.

That year when I learned a hard lesson about how many times my clients would want to buy a house, someone else would be there too. Homes weren’t selling for 50k over, but they would go for asking price or in some cases 5-10k over, which seemed so aggressive at the time. “They overpayed!” we would say in the office the next day, trying to make ourselves feel better and smarter. But I soon realized that with Guelph’s consistent increasing value, that “extra” 5-10k paid was more than made up in a year, and the new owners could relax and start to enjoy their purchase which in a short time would be seen as a bargain.


Let’s put things in perspective:

Over asking price, under asking price, or just asking price really doesn’t matter…

Depending on what the property is worth. If I price a 500k house at 400k and it sells for 515k, did it really go for 115k more than it should? No, it’s our perception that says that. You do have to acknowledge that in order to be successful in a multiple offer scenario, you in most cases have to pay the most. Sure, conditions and closing date factor in on the sellers decision, but more often than not the dollar is what they pay attention to the most.


Have I clearly explained what is happening in our market? I think so. Really nothing has changed. Sure, compared to a couple years ago people are not paying that much over what the asking price is, but I have seen some houses go for 100k over this year, and I have seen others go for 100k less. What was the difference between them? How they were priced and supply and demand conditions.


Whether or not there are bidding wars shouldn’t be the determining factor of why you get in or get out of the market.

Remember real estate is always about “time in”, not timing. I know I have said that before but I love the thought. It has helped me understand how to get the most out of my real estate investments – “buy then wait”.


Conclusion

Now, it’s important to always make offers based on facts and data. It’s not a guessing game. Although properties may go up from where they were before, there are patterns to any market and your realtor should be able to help you understand them. Frankly, if you are waiting to buy because you don’t want to be in a bidding war, you may be waiting a while or end up with a house no one wanted. Remember too, when deciding what price to pay, put a price down where you are happy if you get it and happy if you lose it. You can’t go wrong if you are feeling good no matter what. Take reassurance out of buying a property that others want too. It’s already proving itself as a good investment.

Top Spots for Tobogganing in Guelph

February 19, 2025
Guelph is a fantastic place to enjoy outdoor winter activities, and tobogganing is one of the best ways to embrace the snowy season. Whether you’re looking for a gentle slope for the kids or a thrilling ride down a steep hill, Guelph has plenty of great options. Here are some of the top spots for tobogganing in the area:  1. Exhibition Park One of the most popular tobogganing spots in Guelph, Exhibition Park offers a great hill with a moderate incline, making it ideal for families and younger children. The park is centrally located and has plenty of space for winter fun. 2. Mollison Park Located in the city’s west end, Mollison Park features a well-known sledding hill that offers a good mix of fun and safety. The hill isn’t too steep, making it a great choice for all ages. 3. Kortright Hills Park For those looking for a longer ride, Kortright Hills Park has a fantastic slope that provides a smooth and enjoyable run. The park’s natural setting makes it a beautiful spot for winter recreation. 4. MacAlister Park Another family-friendly location, MacAlister Park has a gentle slope perfect for younger children who are just learning to enjoy the thrill of tobogganing. It’s a quieter location, making it a great place for a relaxed outing. 5. Riverside Park This popular Guelph park has a designated tobogganing area that attracts sledders from all over the city. The varied terrain provides options for both beginner and more experienced riders, making it a great all-around choice. Safety Tips for Tobogganing Always wear a helmet, especially for young children. Ensure the hill is free of obstacles, such as trees and rocks. Sled during daylight hours or in well-lit areas. Dress warmly and wear appropriate winter gear. Supervise children at all times for a safe and fun experience. These top tobogganing spots in Guelph offer a range of experiences for sledders of all ages. So grab your sled, bundle up, and enjoy the winter season in one of Guelph’s best tobogganing locations!

The Potential Impact of Tariffs on Guelph's Real Estate Market

February 19, 2025
With discussions surrounding potential tariffs on Canadian imports, stakeholders in Guelph’s real estate market are evaluating the possible consequences. If implemented, these tariffs could significantly affect housing costs, development projects, and market dynamics in Guelph and the surrounding areas. Possible Increase in Construction Costs One of the most immediate impacts of tariffs would be rising costs for construction materials such as lumber, steel, and aluminum. Since a large portion of these materials is imported from the U.S., tariffs could lead to price hikes, ultimately increasing the cost of building new homes. If material prices rise, builders may pass those costs onto buyers, potentially adding thousands of dollars to home prices. Industry experts predict that if tariffs are introduced, the additional cost per single-family home could range from $10,000 to $25,000. Potential for Higher Mortgage Rates Economic uncertainty caused by tariffs could influence the Bank of Canada’s interest rate policies. If inflation rises due to increased costs on imported goods, the central bank may opt to raise interest rates to curb inflation. Higher interest rates would directly affect mortgage rates, making borrowing more expensive for homebuyers in Guelph. With rising mortgage costs, buyer affordability could take a hit, leading to reduced demand and a slower real estate market. Those looking to purchase a home may need to reconsider their budgets or lock in rates before any potential hikes occur. Possible Slowdown in New Developments Developers in Guelph may hesitate to launch new housing projects if tariffs increase construction costs. A more expensive development process could lead to project delays or cancellations, tightening housing supply in an already competitive market. If fewer homes are built, demand for existing properties could rise, potentially driving up home prices. This would further strain affordability for first-time homebuyers and those looking to enter the market. Housing Market Uncertainty Even before any tariffs are imposed, the uncertainty surrounding trade policies can impact market confidence. Buyers and investors may adopt a wait-and-see approach, slowing down transactions and cooling off market activity. Conversely, if there is speculation that tariffs will push prices higher in the future, some buyers may rush to secure homes before the impact takes effect. This could create short-term market volatility, with a potential surge in demand followed by a slowdown. How Buyers, Sellers, and Developers Can Prepare Homebuyers : Consider securing mortgage pre-approvals early to lock in favorable interest rates before any potential hikes. If tariffs are implemented, it could make homeownership more expensive in the long run. Sellers : Monitor market trends closely. If tariffs lead to increased costs and reduced affordability, selling sooner rather than later might be advantageous. Developers : Explore cost-efficient alternatives for sourcing materials and streamline construction processes to mitigate potential price increases.  Conclusion While tariffs have not yet been imposed, their potential implementation could bring significant changes to Guelph’s real estate landscape. Rising construction costs, potential mortgage rate hikes, and a slowdown in new developments could all impact affordability and market stability. Buyers, sellers, and industry professionals should stay informed and prepared to adapt to possible changes in the housing market.

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