It’s a harsh lesson on buying at the peak of the housing market.
Two years ago, newly built townhomes in Carleton Place, Ont. sold for nearly $900,000. Low interest rates were a driving force behind the hefty price tag.
“Those townhouses were overpriced to begin with,” said Jeff McGuire, who lives in the area. “I think they were asking 200k over than they should have originally.”
Some people bought high but couldn’t keep up with payments, falling into default. The builder re-listed the homes for much less at the end of 2023 — $499,000.
“They couldn’t afford the home or what they wanted to afford. So their plans changed,” explained real estate agent Peter Sagos. He sold a few properties in the new subdivision, including 182 Hooper St, both times. The original buyers who couldn’t make the payments may be in further trouble from the builder, he says.
“The seller could go back and through litigation receive the other end of the money that was from the original contract.”
“A couple of the builders I work with did the exact same thing,” said real estate broker Paul Rushforth. “They lowered the price drastically, called it a Christmas special.”
These were priced high and sold during a low interest rate fueled boom in 2022.
“When something sells at a lower price, that sets the bar,” said Rushforth. “As a resident, does it suck? Yes, but listen, the builder needs to do what he has to do to get his product sold.”
Garet Avery lives nearby and is worried about the fluctuating prices and what this means for his home’s value.
“Even if I wanted to sell this place, with the current taxes and the property assessment, it’s just going to drive people away and look the other way, look somewhere else because the value of the house and the amount of taxes,” he said. “It’s not looking good for turnaround.”
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