The wake-up call for a generation of wide-eyed home buyers
A wide swath of young homebuyers is beginning to grapple with something unseen in their adult lives—a market that actually goes down
by Jen Gerson Apr 17, 2018
Not everybody is going to have sympathy for the group of homebuyers in Oakville, Ont., who say they are facing financial ruin on new homes thanks to attempts by the Ontario government to cool the housing market.
These weren’t housing speculators trying to score quick bucks, according to the Toronto Star story published in early April. The cost of their new homes, which ranged between $1 million and $1.6 million, were entirely in line with average market prices. The buyers talk of scrimping and saving; of living with extended family to make ends meet.
Claudia and Darren Evans, for example, purchased their home for roughly $800,000 in 2013, according to Mattamy; in that time, the property’s value appeared to make extraordinary gains, prompting the couple to purchase a comparable home with a better floor plan for their young child—now valued at close to $1.6 million.
After agreeing to buy the new home, the Evans’ put their old home on the market, but received only low ball offers.
“We haven’t put our house on the market again and we need to close in seven weeks. There is no point. We are watching the market so closely with our realtor and we can’t afford to take the amount of money that we will get offered right now. If we got a delay in closing then it would be fine. I’m sure the market will recover in time,” Darren Evans told the Star.
In order to make up the gap between the price they agreed to for the new home at the sale date in 2017 and the appraised value of the home on the close date, the couple will need to rely on a third-party lender offering very high rates. (Reached by Maclean’s, Claudia Evans declined to participate in the story.)