A housing scarcity and a glut of wannabe homebuyers in Sarnia is creating bidding wars and routinely attracting offers 10% above asking price, and sometimes as high as 30%.
“I’ve never seen anything like this,” says Steve Park, a 30-year sales veteran and president of the Sarnia-Lambton Real Estate Board.
“There is almost nothing to sell but we have buyers, so if a house is listed for what it’s worth, there are bidding wars.”
Park described a recent scenario in which a city home was listed for $279,000 and received seven offers. The home sold for $340,000, a stunning $60,000 over the asking price. Such inflated offers are rare but are happening for the first time.
A big factor in Sarnia’s hot real estate market is GTA residents interested in moving, according to Park.
“The rest of Ontario is starting to treat Sarnia like a grown up,” he said. “When I’m in Toronto speaking about Sarnia now, I see interest and respect.”
There was a time the only out-of-town calls came from people being transferred, Park said.
“Now people are coming because they want to. They like the prices, they like our waterfront, our First Friday, the theatre. This is a beautiful place we live in.”
A steady stream of revitalization and reinvestment has made a once decaying downtown an appealing place to live and do business again, said Park.
“There’s people living there now and there never was before. Look at the high-rises.”
Tricar Group of London has built two towers and plans to start construction of a third in May at the corner of London Road and Christina Street.
Park said there’s a big need for rental apartments and lengthy waiting lists currently exist for most buildings. That has discouraged some older residents from putting their houses up for sale, because they have nowhere to move to.
And that has contributed to an historically low number of houses on the market, Park said.
Ten years ago, there would be 750 to 1,000 listings at any given time. At the end of February, the real estate board reported 157 residential listings throughout Sarnia-Lambton. Fifty-nine houses sold in February in Sarnia, compared to 76 in February of 2017. Most went for between $150,000 and $250,000.
Despite bidding wars, out-of-town residents accustomed to Toronto prices still view Sarnia as a bargain, Park said.
“If we had more inventory, we’d be selling it.”
Local Royal LePage Key Realty broker Doug Bain is president of the Sarnia-Lambton Home Builders Association and blames a lack of building lots for the housing shortage.
Bain said prospective homebuyers “are taking a kicking” because supply is so limited in Sarnia.
“There are fewer than 100 houses for sale in Sarnia. I’ve never seen it this low,” Bain said.
He recently spoke to city council about an urgent need to assemble serviced land for Sarnia’s homebuilders. Without additional lots, the city will run out of building lots in about a year, said Bain.
“After that, builders will be forced into the county. That’s going to impact Sarnia’s growth and its economy,” he said.
“I think we’ve all been taken by surprise and are just realizing the extent of the problem.
“Ask any local builder and they’ll tell you everyone is fearful there will soon be no building lots at all.”
When Nova Chemical begins work on a $2-billion polyethylene plant in St. Clair, Sarnia’s housing shortage could become even worse, Bain added.