I’ve never started a new magazine, and truth be told, I’m not doing so right now.
“OK Chris, thanks for the update. Good to know.”
But I AM happy to be writing for the brand new London Inc. publication, whose premiere issue you can find here.
The magazine is the creation of Gord Delamont, long-time editor of Business London, which for years he made the place to go for stories about interesting people running interesting businesses in and around London. London Inc. will continue that tradition, starting this month.
Gord asked me to write about the city’s bonkers real estate market, a phenomenon fuelled by escalating demand from buyers living elsewhere – either in Toronto or offshore, largely in Asia.
Real estate booms are weird things. Their effect for most people is theoretical. If I sold my home I could cash in…but then what?
If you’re moving to a smaller community, that windfall could be wonderful. If you’re moving to another part of the city, you’ll quickly be caught up in the same forces that jacked up your selling price by $50,000 or $60,000 over asking.
In an odd way, the increasing value of existing homes stops some from selling. Staying put keeps them out of the volatile market. So there are fewer homes on the market, despite the potential for bidding wars and unexpected offers. And if there are fewer homes on the market, the prices for those listed, of course, go up. Thank you Economics 20 in the Social Science amphitheatre at 8:30 Monday mornings.
I talked to real estate sales reps and several people who tried for months to buy a home. They all reported a version of the same story: For many properties, the new normal in London is multiple offers – we’re talking 10, 15 or 20 frequently – and the need to forgo conditions on the offer you make.
The system is such that people making the biggest purchase of their lives -- taking on six-figure debts structured so they pay down almost none of the principal for several years – cannot ask for a home inspection if they expect their offer to be accepted. How does that make sense?
Sales reps are busier than ever, enjoying commissions on properties that often sell within days for well above asking price. But they’re also spending a lot of their time consoling clients who have just lost out yet again on a home they dearly wanted to buy.
After I wrote the story, one rep told me he was waiting that day to get the bad news about an offer his client had made on a house. The client was from Toronto, as were all the people making offers on the house, about a dozen in all. His client had bid $50,000 over asking, and the rep expected to finish dead last.
So goes the London real estate market, nowhere near as crazed as Toronto, but in unprecedented territory largely because of what’s happening there.