Mr. Schmelzer believes easy access to credit is to blame. “I go to the bank to get preapproved for a mortgage, and I’m thinking a maximum $600,000 mortgage, and the bank is telling me ‘why so little? Why don’t you go to a $900,000 or $1-million mortgage?’” he says. “I answered that I guess they don’t mind me paying my mortgage until I’m in my mid 70s or 80s.”
But there are signs that the banks are not willing to lend to just anybody. For instance, Toronto-Dominion Bank’s mortgage arm TD Financing Services Home Inc. recently decided it will stop giving mortgages to “non-prime” borrowers (those with bad credit history or credit scores) starting at the end of this month, because the bank felt that staying in that line of business would require it to take on too much risk.
And, Mr. St. John points out, there are even bidding wars for rentals right now. “There just isn’t enough product on the market,” he says, especially in hot neighbourhoods. For instance, he points out that out of roughly 5,000 homes in Leaside, there are usually about one dozen for sale.
Hot market, shady tactics
Renee Frigault and her partner started their house hunt after Christmas and are still looking. “In the last two months, we’ve put in offers on three separate houses, every time losing by the skin of our teeth,” she says. They lost the first one by less than $5,000 because they didn’t like the seller’s tactics.
“The seller’s agent swore that offers would be a one-shot deal,” she says. “Taking them at their word, we put in our best offer and had the high bid. Then, of course, they sent back for re-bids. We were surprised by the flexible ethics and walked away.”
Matthew Slutsky and his wife Carlie Brand sold their downtown condo in November and have been searching for a house ever since. They’re currently staying with Ms. Brand’s parents. But they refuse to give in to auction fever.
“I help sell hundreds of millions of dollars of new construction, but I can’t find a resale house for myself,” says Mr. Slutsky, 32, who is the CEO of real estate site BuzzBuzzHome.com.
So he and Ms. Brand have taken to going door-to-door and handing out letters at random houses they like to see if the owners would consider selling.
“We’ve had a few calls back,” he says.