In the past ten years Kitchener Waterloo has witnessed explosive growth in high-rise condominiums construction. We have a very healthy and ever expanding condo market. Seagram, Bauer, Kaufman, 144 Park, Arrow, Eaton, The Alex, The Red Condos and student buildings like Sage, K2 to name a few are all well known to anyone who has been following our local reach for the sky. Victoria 1, City Centre, The Barrel Yards, and IvyTowns are all just getting started or just about to start selling too.
For the record, every week I get one or more inquiries about these buildings. Furthermore, I have clients waiting in the wings, ready to strike as soon as the perfect unit becomes available in Seagram, Bauer or the 42. If CTV was to interview me, I would tell a very different story than the people they chose to ask last night. But I’m just one agent, a small sampling.
It is often a news story that sets me off to blog my thoughts. Having worked in the newspaper business before becoming a real estate agent, I know firsthand what sells newspapers or TV advertising – hyperbola.
Never let the truth get in the way of a great news story.
Hype, smoke and mirrors also sell condos. I’m not here to defend either business model. There is truth, and there is truthiness. The truth will always come out. I’ve written before about condominiums, how it feels living in a small concrete box fifteen floors above street level, which I’ve done twice in my life. It was nice at the time but I wouldn’t want to do it now.
The CTV news story, “Buyer’s market? Checking in on Waterloo’s burgeoning condo scene” starts out by interviewing a former student housing landlord, who says that the student housing market is a buyer’s market. I can’t comment on that. I don’t really get involved in this market much. It’s a Toronto market. The developers are from Toronto. The investors are from Toronto. And, it is a small niche of the condo market, not representative of the condo market in KW as a whole. Having said that, if you wanted to invest in high-rise student condo buildings, I think you’d find that they sell fast.
The CTV news story ends up by talking about zoning changes to accommodate another student high-rise building – the Sage VI, again not really relevant to the general “too many condos” argument.
In the middle of the story, CTV interviews Bill Keay a local Realtor. The great thing about real estate is that we have the data.
Data compiled by the Kitchener-Waterloo Association of Realtors shows that 66 condo units were sold in January, up from 40 in January 2013.
That’s a great statistic, but it doesn’t really mean much, does it?
What’s the condo market really like in Kitchener Waterloo?
So I went to the source, the realtor database (where the MLS gets its information) and here is what I found out:
There are 218 high-rise condominium units currently listed for sale in Kitchener Waterloo. None of them are units in student high-rise condo buildings.
18 of those are for sale or lease. I’m taking those out because if your motivation is to sell or to rent, your motivation to sell isn’t that high.
That leaves 200.
Of those, 18 are conditionally sold, 2 are from the sell/rent group above. Of those 16, 8 are located in Kitchener and 8 are in Waterloo. The conditionally sold units range in price from $122,900 – $319,900.
After we take out the for sell/rent and the conditionally sold, there are 184 high-rise condo units currently for sale in Kitchener Waterloo. They range in price from $107,000 to $995,000. Frankly, I don’t know if that is a lot or not. As a point of reference, there are a total of 1323 homes (including condos) currently on the market in Kitchener Waterloo.
Is there a glut?
If there is a glut of condominium units on the market, there would be price depreciation. The time to sell would also expand. So let’s look at what has conditionally sold.
There are 18, 2 of which were sell/rent.
That leaves 16.
3 of those sold after their price was reduced.
That leaves 13.
The average time to sell those 13 condo units is 29.57 days. That’s not very long. The shortest took 9 days to find a buyer. The longest took 89. If I knock out the 89 and the 83 as outliers at the top and 9 and 12 as outliers at the bottom, the average time to sell a condo in Kitchener Waterloo is 29 days. 29 days to sell is not long at all.
With residential real estate, we are currently in a sellers market. I think CTV is asking the wrong question to the wrong people. The question should be, “Seller’s Market already? What’s going to happen when the warm weather comes?”
Also, I think the argument above is a better snapshot of the market than comparing it to the same month last year.
This post was written at the end of February 2014 using data available through Kitchener Waterloo Association of Realtors.