By Sarah Sweet
Everyone knows that real estate markets in Toronto and Vancouver are sizzling: prices are sky high, and properties are selling for tens of thousands over asking. But there’s a piping-hot real estate scene even closer to home – right here in Markham. The most recent statistics from the Toronto Real Estate Board (TREB) reveal that the benchmark price for a single-family detached home here was $1,167,100 this past September – 26.63 percent higher than it was in September 2015. That million-plus figure puts Markham on a level above both the City of Toronto ($999,900) and the York Region as a whole ($1,031,400).
This upward trend doesn’t affect only a few choice neighbourhoods. While Unionville remains a go-to spot for buyers, its popularity is only driving demand, and prices, elsewhere. Suzanna Maya, a broker with Re/Max Hallmark Realty Ltd., observes that “neighbourhoods that didn’t historically perform as well” – older neighbourhoods such as Raymerville, Markham Village, Sherwood-Amberglen, and newer areas such as Cornell, Angus Glen, and Berczy Village – are beginning to move up in price. William Doutsas, broker/manager for the Re/Max Realtron Realty Inc. in Markham, sums up the current climate: “All of Markham is selling.”
It’s no mystery why buyers find Markham desirable. “Everything a city can offer, you can find in Markham,” says Rose Khosravani, who works as part of a team with Jasmin Zandi at Century 21. “We are close to all major highways, arteries. We’ve got excellent school districts, good industry – and major companies are located here.” The area’s appeal isn’t limited to prospective buyers from the GTA: the real estate professionals I spoke with offered anecdotal evidence that the participation of foreign investors in the market is also contributing to the skyrocketing prices.
Although demand continues to grow, the number of available properties is shrinking – and the result is a tight market. “We’re on pace for record sales,” explains Jason Mercer, TREB’s Director of Market Analysis and Service, “but there aren’t as many listings as we saw last year, so that’s caused an acceleration of price growth and more competition between buyers.”
And the competition can be fierce. Bidding wars are now common, and most homes sell for more than the asking price. Doutsas says that buyers “go to offer presentations six to ten times before they get the home they want – so one comes up, and then they swarm like bees, and they all try to get it. Then another comes up, and they swarm again.” The intense rivalry means that a house-hunting experience that would once have taken two or three weeks can now stretch as long as six months.
Today’s would-be buyer, then, is confronting a pretty grim prospect: months of searching, stressful strategizing, and then, at the end of it all, a house that comes with hefty mortgage payments. Common wisdom has long held that it’s important to participate in the market. But the memory of the American subprime mortgage crisis of the 2000s, which decimated property values and the nest eggs they represented, still looms large: Is there any danger that the Markham market is overheated, that an investment made today will not pay out tomorrow?
The realtors I consulted emphasized that there’s no indication that there’s any crash on the horizon. “For the last few years, I’ve heard on the radio ‘The bubble’s going to burst’ – hasn’t burst yet,” says Sylvia Morris, a sales representative with Century 21. Doutsas is equally skeptical: “People have been saying for years that it’s a bubble, it’s going to blow up, and it hasn’t happened.” He advises prospective homeowners to “buy today, not tomorrow.”
But new measures recently introduced by the federal government – including a stress test intended to ensure that borrowers will be able to make their mortgage payments if interest rates rise – will almost certainly have an impact. “I think that the prices in Markham are going to come down because of these changes,” says Monika Jazyk, a real estate investment specialist with Real Property Investments. And if the government brings in a tax on foreign investors, that, too, could lead to some cooling. “We’re a largely foreign investor–driven market,” says Jazyk, “and if they stop buying, who is going to buy?” In Jazyk’s view, the best thing to do is wait: “Do not buy in this market now. Rent. Save your money.”
Buying a home has always been stressful, but the dissenting opinions of the experts, the steep prices, and the pressure to make major decisions too quickly have ensured the stakes have never felt higher. What’s a potential homebuyer to do?
If you opt to delay your house-hunt, make sure you’re saving money while you rent. Jazyk notes that if you’re anxious to participate in the market, you could invest in Markham real estate without buying bricks-and-mortar property – through some of the new developments, for example. “The developers behind these companies actually work with mortgage brokers, allowing people to place their registered funds and participate in that development,” she says. “Rather than buying one of the new condos and parting with 60 or 70 thousand over three years, why not take that same money and receive an immediate return before the shovel has even hit the ground?”
And if you decide that you’re not willing to take the risk that housing prices will fall or at least stall, enter the market as an informed competitor. “Look at what your wish list is,” advises Maya, “and see what’s most important for you.” Then, she says, pick a neighbourhood and stick to it: “I find from experience that [when buyers are looking in a number of areas] it takes them longer, and very often by the time they look in all these neighbourhoods, the prices are inching upward. It’s better to focus on one or two.” Don’t give into the temptation to throw your budget out the window. “Set your limit,” says Royal LePage sales representative Karen Gerrard. “Don’t get to the point where you’re so excited that you’re going to get caught up in a bidding war.”
It might also be necessary to change your vision of what a dream home looks like – while $1,167,100 is well beyond the reach of most buyers, Markham townhouses and condominiums present a more realistic option. “If an average family – mom, dad, two kids – want to buy something in Commerce Valley, or somewhere more central,” says Zandi, “what are the chances they’re going to get a home for $500,000? Big zero. But they can buy a two-bedroom apartment. That’s something that’s affordable.”
Developers are responding to the lack of available land and the demand for lower-cost housing, and new condominium complexes such as Downtown Markham and Uptown Markham are springing up throughout the area, leading the Toronto Star to dub Markham “the next high-rise community.” Architectural renderings show us clusters of amenities, cheerful and relaxing green spaces, and pedestrian-friendly streets – a far cry from the traditional bedroom community. Richard Cunningham, President of the Markham Board of Trade, believes this might be one of the answers to attracting a younger Markham workforce. “We need to be looking at much taller buildings, 30 to 50 stories,” says Cunningham. “Raising the height of buildings, along with access to public transportation and amenities, will make the cost of buying real estate in Markham much more affordable.”
Apartment towers, intensification, mixed-use communities: it seems that the Markham of the future may end up resembling Toronto and Vancouver in more ways than one.