"Fear of missing out" is gripping real estate buyers throughout the Greater Toronto Area this spring.
People have long expected buyers to do fierce battle for a red-brick semi in Roncesvalles Village or a Tudor-style detached in Allenby – and then last year, the competition spread to suburban homes with two-car garages in Mississauga and Whitby.
This spring, a condo townhouse in Oshawa had 12 people vying for it. One-bedroom condos in Pickering are also hot – if they have the right address.
T.K. Butler of HomeLife/Cimeran Real Estate Ltd. says the first-time buyers he works with feel "horrible" after entering too many dust-ups.
"We have to keep moving farther out of the city," he says. "The price inflation is just crazy."
Mr. Butler drives many first-time buyers and downsizing retirees around Durham Region to look for properties.
For a long time, the condo market was stagnant, he says, and the price gap between single-family dwellings and condos kept widening. But dynamics are changing again. "It was the tale of two markets for many years," he says, until "people all of a sudden said 'I can't afford a house.'"
Mr. Butler says he advises people on whether they should enter a bidding contest for a condo on a "case-by-case" basis. When prices are jumping at a fast clip, missing out on one property may mean paying more the next time they find one they like.
"In the 905, there are just not that many condos," Mr. Butler says.
He also finds that buyers have different priorities outside the core. While young, downtown buyers are willing to accept a smaller unit in return for cool finishes and a trendy location, buyers in the 905 are looking for a larger space. Views, good layouts and penthouse suites are often on the wish list. In many cases, retirees don't worry too much about traffic because they're no longer working. They have cars and they are willing to drive.
"They're used to it and they're willing to accept it."
One very popular pair of buildings is located on Valley Farm Road near the Pickering Town Centre. Numbers 1880 and 1890 were built in the 1990s by Tridel, he says, and they have a good reputation. There are a lot of amenities, such as tennis courts and a swimming pool. There's also a strong sense of community.
Mr. Butler says that condos were unusual in the suburbs 25 years ago, so developers had to pack a lot into them to attract buyers. Now, those older buildings are the most coveted. Being close to GO Transit is not a priority.
"You have to walk across a bridge over the 401 to get to the GO," he says, but the mall is right next door.
Another building that is right beside a GO station but doesn't have the same activities and proximity to the mall is not successful, he says.
Shawn Lackie of Coldwell Banker R.M.R. Real Estate has also seen a flurry of multiple offers for condos.
Recently, a condo townhouse in Oshawa was listed through his office with an asking price of $139,000. A couple of weeks later, the seller had a deal for $171,000 after 12 bidders had taken a run at it. But there were some twists along the way.
Within one day of listing the condo, the seller received an offer of $155,000, but it was conditional on financing, a review of the condo's status certificate and a home inspection. The seller mulled it over for a few days before agreeing. But the same day they struck a deal, the agent found out the buyer was unable to secure a mortgage.
The deal was dead and the seller was devastated, Mr. Lackie says.
The agent listed the property again at $144,900 and set an offer date one week later.
That time, the seller received 11 offers and accepted the one with no conditions except a review of the status certificate.
Mr. Lackie says the sense of urgency seems to come from an irrational fear amongst potential buyers that if they don't get that one place, they won't get any place.
He believes real estate agents need to help quell the anxiety that some buyers are feeling.
"If there is a sense of panic, that manifests itself in the bidding process and logic goes right out the window."
A second factor at play, he says, is how competitive humans become when they feel someone else wants what they want.
"The majority of people just don't like losing and that sensibility becomes a big part of their bidding."
That type of rivalry used to be rare in the condo market because there are more units available and there's less to distinguish one unit from another. But still, the mentality has spilled over into that market, he says.
Sales of new condos in the 905 doubled in the first quarter of 2016 compared with the same period last year, according to market research firm Urbanation.
Mr. Lackie says some house hunters who've been worn down by shopping for single-family dwellings expect buying a condo will be easier.
"I think it's just more buyer fatigue. They're getting tired of losing all the bidding wars, so they're turning to condos."
As for the outlook, Dina Ignjatovic, an economist at Toronto-Dominion Bank, expects Canada's housing market to remain healthy this year. While she cautions that the stronger the market becomes, the higher the risk of a correction down the road, she still sees it as a bright spot in the country's economy. The market may moderate gradually over the second half of the year, she says, but she expects it to continue to support economic growth.