2 Comments

A Semi-Detached In Kitchener Sold For $301,000 Over Asking Price

The media has been all over this one. A semi-detached home in Kitchener which was listed for $500,000 has sold for $801,000 and the media has been all over it. At first glance this seems like an outrageous price, why would someone overpay by $300,000? However, once you start looking at the whole picture and breaking down the details it starts to make a little more sense. So let’s properly break down what happened here, and try to understand why someone’s realtor felt it was a normal price to pay for this property.

The first issue with everything we’ve been seeing in the media, and all of the social media snapshots being shared (like the one above), is that it doesn’t show the whole picture. We don’t get any details about the home itself, and we don’t get any details on what semi-detached homes have been selling for in the area recently. We just get the shock factors which are the low list price, high sale price, and outrageous number of offers. Doom, gloom, and shock! By the end of this article you’ll understand why all of these numbers make perfect sense (except maybe the list price).

The Subject Property

Let’s start by looking at the details of the subject property first. It was a renovated semi-detached home, with a walk-out basement (nice bonus), backing onto green space (now we’re talking!), and had potential for an in-law suite in the basement! An in-law suite is like an accessory apartment with its own entrance, kitchen, bathroom, living space, and bedroom. That is a huge bonus as it’s almost like you’re buying two properties in one. It’s ideal for an income helper, or for a large family/shared living setup. Either friends could buy this together and split costs, or a multi-generational family could live here while each having their own separate space. This is a huge bonus of the property which is rarely mentioned in these dramatic posts being shared.

In addition to the potential in-law setup, the home backs onto green space, which means no neighbours and beautiful views! Not many homes in our city have this added privilege, and when you are buying from a builder they charge anywhere from $50,000-$100,000 as a lot premium for properties which back onto green space or have view of green space. Another huge bonus not being mentioned anywhere.

Understanding The Market

Now, without understanding what’s going on in the market it’s difficult to assess whether or not someone paid an outrageous price for the property. So we have assessed the subject, but now we need to compare it to what is happening in the market. For example, someone buying a semi-detached property with an in-law suite in Toronto and paying $300,000 over asking doesn’t mean anything without the final price. If this hypothetical Toronto buyer secured that property for $801,000 that would be an amazing deal! Even if they paid $500,000 over asking, as long as the final sale price is $801,000 it does not affect how good of a deal it was.

Curious About Your Home’s value?

Get an instant value report sent to you within 3 minutes!

    Find Out How Much Your Home is Worth

    Unit #

    St #

    Street Name

    City

    Bedrooms

    Basement

    Age

    Home Type

    Square Footage

    Bathrooms

    Basement Entrance

    Garage Spaces

    Storeys

    Ownership Type

    First Name

    Last Name

    Email

    Phone

    This whole $300,000 over asking is just a fancy shock factor. The number that matters is the final sale price, and how it compares to the market for similar properties. This is because the starting price is almost irrelevant. There have been semis which sold for $860,000, heck there was even a semi-detached that sold for $967,000, but they don’t make the news because the starting price was close to the sale price, and $50,000-$60,000 over asking just isn’t shocking enough and click-worthy for the media to run ads on it.

    So let’s understand the market, the average price of a semi-detached home in the West end of Kitchener is $720,000. Now we have something to compare the sale price to, and to explain some of the shocking numbers being gloated on social media.

    Analyzing The Sale

    Let’s start by agreeing that based on the details of this property it was an above average property. It backs onto green space ($50k-$100k value), and it has potential for an in-law suite ($1,200/month in rent = $14,400 yearly value).

    The final sale price of $801,000 is $81,000 above the average sale price of a semi-detached. But the home arguably has over $100,000 in added value above the average semi-detached property. When we assess it with all of the facts, this buyer got a fair deal if not a great deal!

    Let’s break down some of the other shocking numbers: $301,000 above asking, and 53 offers.

    The starting price was $500,000- that’s $220,000 below the market average. That’s more than 70% of the shocking $301,000 over asking being made up for by the home being listed way under the market average, let alone the other bonus factors the property had. This also explains the shocking 53 offers. Of course it had 53 offers, I’m surprised it didn’t have 100 offers. The home was listed for $220,000 under the market average, every buyer looking for a property right now knew that was a great deal. Any agent who did their homework knew that their clients had to pay above the average price for this property.

    Conclusion

    Starting price doesn’t matter, the amount over asking doesn’t matter, the media loves to flash these numbers because they are shocking and entertaining but they are irrelevant. What matters are the details of the home, current market conditions, the final sale price and how it compares to the others.

    Once we filter out the noise and focus on the important facts we can clearly see that in this case the buyer paid a fair value for what they got.

    Got questions? Agree or disagree? Let us know!

      Contact Us

      Your Name (required)

      Your Email (required)

      Your Phone

      Your Message

      Featured Video


      google logoWRX Property GroupWRX Property Group
      5 Stars - Based on 34 User Reviews

      Search for Homes Online
      About WRX Property Group

      No Comments

      Record Breaking Real Estate Prices in January 2021 – Kitchener-Waterloo Market Report

      Kitchener-Waterloo February 2021 Real Estate Market Report

      While the real estate market has been extremely “hot”, it apparently isn’t doing much to warm up the weather outside. I hope you’ve been doing well and keeping safe during this winter madness!

      In January 2021 we saw 310 residential properties sell, compared to 314 in December of 2020, and 240 in January of 2020. Typically both December and January are “slow” months for real estate in Kitchener-Waterloo. This is mainly due to the holiday season, and then the post-holiday recovery.

      However, this year we have seen an increase in sales during both of those months. One of the reasons is due to the COVID restrictions. With folks not being allowed to visit families and friends over the holidays they have had a lot more time to continue shopping for homes. Another reason is the increased demand in the region. With our population continuing to grow, and the region adding more and more tech jobs, we are going to see a continued increase in demand and sales.

      With spring around the corner, and the COVID restrictions in the region loosening up, I expect that this trend will continue into the typically busy spring market as the snow melts and we shed our winter coats. If the early start to the year has been any indication of what’s to come, the spring market is going to be one for the ages!

      So does this mean prices are going up?

      At the time of writing this there are only 190 properties available for sale in Kitchener-Waterloo across ALL property types, and only 92 freehold detached homes. Given that there were 310 properties sold in January, and there are only 190 available for sale right now, I would say we have a serious supply problem. If no new homes came on the market, Kitchener-Waterloo would be sold out in less than 1 month. That is a serious supply and demand recipe for a jump in prices. Combine it with the historically low interest rates, and yes price will go up- A LOT!

      How much have the prices gone up?

      The average sale price across all residential properties in January 2021 was $666,325 which is a year-over-year increase of 22.88% compared to the January 2020 average of $542,256, and a 7.6% increase compared to December 2020 ($619,068). The average sale price for detached homes in January 2021 was a staggering $830,402. Up 26.7% compared to $655,423 in January 2020. Prices are up, and they are up significantly compared to last year! As mentioned earlier this is due to the supply and demand factors, and an increase in demand due to lower interest rates (among other increases to demand in the region).

      Curious About Your Home’s value?

      Get an instant value report sent to you within 3 minutes!

        Find Out How Much Your Home is Worth

        Unit #

        St #

        Street Name

        City

        Bedrooms

        Basement

        Age

        Home Type

        Square Footage

        Bathrooms

        Basement Entrance

        Garage Spaces

        Storeys

        Ownership Type

        First Name

        Last Name

        Email

        Phone

        The average number of days to sell in January 2021 was 22, compared to 33 in January 2020. So once again, homes are selling fast, and the main driving force is the increase in demand and the persistent low supply of homes.

        Below is a chart representing average sale prices of detached homes in KW:

        As you can see the prices continue to be on an upward trend, and we expect this to continue throughout the rest of the year barring some unforeseen circumstances.

        Taking a look at semi-detached homes:

        Very similar to what we saw with detached properties. Sloping upwards and indicating a price increase trend.

        Taking a look at townhomes:


        Townhomes are also showing an upward trend, indicating prices are increasing.

        Featured Video


        google logoWRX Property GroupWRX Property Group
        5 Stars - Based on 34 User Reviews

        Search for Homes Online
        About WRX Property Group

        Apartments:

        Condo apartments are a bit more difficult to represent in a single graph, for a wide variety of reasons, and they could have their own market report dedicated with the amount of content required. For illustration purposes the above graph is showing the sale price of 1-bedroom condos. Condos have danced around on the charts but are starting to show a positive upward trend in recent months.

        Part of the reason condos are difficult to represent on a graph is due to so many small factors which play a role. For example condos range from 1-3 bedrooms which greatly affects the sale price, and if one month there are more sales of one than the other it will skew the graph. Another factor in condo prices are condo fees. A 1-bedroom condo with a $500 condo fee will sell for a lot less than the same condo with a $300 condo fee. This makes it difficult to assess the accuracy/representation of any single month. If you have questions about a specific condo building please feel free to reach out and I will be happy to provide further details.

        View Homes For Sale in Kitchener-Waterlooo

        Wrapping it up:

        I’m sounding like a broken record at this point, but as we can see from all of the details above, the KW market is in high demand and appears to have a continuing upward trajectory in terms of prices. As has been the story for the last year we are plagued by low inventory for homes, meaning we are in desperate need of homes for sale. Between the inventory levels, low interest rates, and increasing demand, I expect prices will continue to see gains throughout the near future and likely the rest of 2021.

        While this is great news for the local market sellers, it’s still important to proceed with caution. Practice safe social distancing, wear face covers as much as possible, and avoid unnecessary trips by taking advantage of virtual tours only visiting homes which are very likely to work for you.

        For potential buyers this type of market can be very difficult to navigate, and it’s rather disheartening when it comes to offering on properties. We are once again seeing homes get 20-30 offers, and this means there are up to 29 disappointed buyers each time around. Acting quickly and having all of the necessary arrangements in advance will help your chances, but persistence will also be a determining factor. It can be difficult to continue when you’ve lost 4-5 properties in a row, but having the right team behind you will eventually result in success!

        If you are curious about your home’s value you can check out our instant home evaluation tool by clicking here.

        Have A Question?

          Contact Us

          Your Name (required)

          Your Email (required)

          Your Phone

          Your Message

          No Comments

          7 Tips to Instantly Increase Your Home’s Value



          Read more

          No Comments

          3 Quickest Ways To Increase The Value Of Your Home

          Read more

          No Comments

          Kitchener-Waterloo Real Estate Market Report – July 2020

          It’s officially summer, and along with the temperature rising the real estate market has also been heating up. Demand is up, we are still experiencing low inventory, and it seems like the spring market has officially started (even though it’s technically summer).

          In June 2020 we saw 580 residential properties sell, compared to 357 in May of 2020, and 589 in June of 2019. WOW! That’s a huge recovery compared to what we were seeing in the last few months due to COVID-19.

          Read more

          No Comments

          History of The Walper Hotel in Kitchener-Waterloo

          The Walper Hotel

          Welcome to the WRX Property Group website and blog! Today we’ll be taking a look at one of Kitchener’s most iconic buildings: the Walper Hotel (or the Walper Terrace Hotel, if you’re not into the whole brevity thing). It’s stood proudly at the corner of King Street and Queen Street, right in the heart of Downtown Kitchener, for over a century. But to understand the full scope of the Walper Hotel’s story, we must go back even further.
           

          Varnum Varnish

          Joseph Schneider settled in what would go on to become the Waterloo Region that we know and love in 1806; he was part of the first wave of Mennonite settlers moving north from Pennsylvania. Schneider kept quite busy, but salient to our tale is that he purchased a fair bit of land (well over 100 acres). And he leased a large parcel of this land to a man by the name of Phineas Varnum in 1820 (courtesy of Schneider’s Biographi).

          Read more

          No Comments

          Bridgeport Casino Kitchener

          Bridgeport Casino Kitchener

          Greetings! Welcome to another edition of the WRX Property Group Real Estate Blog! Lately, we’ve been diving into the history of the Waterloo Region, finding what pearls of wisdom we might find. Today’s historical entry pertains to a specific neighbourhood in Kitchener: a neighbourhood that, not so long ago, was its own separate community, but now constitutes a diverse and growing part of the overall city. Our point of entry? A certain casino, which though no longer a casino, still serves as an important part of the neighbourhood. So, without further ado, let’s consort with Bridgeport (no need to contort, unless as a last resort)
           

          River Port, Bridgeport

          Waterloo and Kitchener (or, as it was known until 1916, Berlin [there’s a separate article on the Berlin to Kitchener Name Change; read it here]), along with several other nearby communities, were founded in the early nineteenth century by a group of adventurous Mennonite settlers from Pennsylvania. The earliest iteration of Kitchener dates back to around 1803. Bridgeport took shape a couple decades later.

          Read more

          No Comments

          Freeport Bridge Kitchener

          Freeport Bridge in Kitchener

          Greetings! Welcome to another exciting edition of (and addition to) the ongoing WRX Property Group ‘History of the Waterloo Region’ series! We’ve been dipping our toes in local history as far back as the first group of Mennonite settlers from Pennsylvania in the early nineteenth-century, up to more recent historical moments like the founding of BlackBerry. But sometimes you don’t want to dip your toes in anything, and for those times, it helps to have a bridge. So today, we’re going to look at a historic bridge.
           
          This is a bridge many of us have travelled across (some multiple times a day). Standing by the southwest corner of Kitchener, spanning the Grand River below the Chicopee area and just above Deer Ridge, it serves its purpose nobly. But because bridges lack mouths (and sentience, for that matter), not everybody knows its story. It’s time for the story of Freeport Bridge.

          Read more