Chaos in Toronto’s Real Estate Market? The Truth About What I’m Seeing
December 1, 2021
It’s no surprise that people always want to talk real estate with me. With headlines about properties selling for hundreds of thousands of dollars over asking or about a mass exodus of people leaving the city, it’s no wonder. From the news, it seems like the market is chaos!
However, I feel a sense of detachment when I read articles about the market. Everything I’m reading, from trends to stats, seems very different than what I’m experiencing.
The truth is there are still not enough properties for the buyers who are looking. Though a number of people may be leaving the downtown core, even more are looking to relocate here.
The latest statistics indicate that far fewer new listings hit the market in October 2021 as compared to October 2020. One reason might be that the stats were slightly “manipulated” before. Realtors were in the habit of listing a property, terminating that listing and then re-listing at a new price. Sometimes this happened multiple times within a month with multiple properties just to make the listings look fresh and new to the market!! TRREB is now fining real estate agents who terminate a listing and then re-list at a different price if they do it within 60 days of the original list date.
The practice of listing/re-listing may seem harmless, but it definitely skews the numbers. An agent may be able to boast that a listing sold in 48 hours, but doesn’t mention that the home had been listed twice before at a different price.
Many agents will price a home under market value and set an offer date. If they don’t receive any offers (or any offers high enough), the common practice was to terminate the listing and re-list at a price closer to what the seller will accept. I’ve been trying to stay away from that strategy and listing at fair market value. If we don’t get any bids on offer night, which oftentimes we don’t, we’re at the right price and we accept offers any time.
While some listings are selling very quickly and in multiple offers, many are taking longer.
You might ask, with a lack of properties on the market, why isn’t everything being snapped up? I’ll tell you!
There are four reasons why a property might not sell:
Often a seller is asking for more than a property is worth and then unwilling to negotiate with a potential buyer.
Believe it or not, some sellers make being able to view a property very difficult. It can also be a challenge to show a property with a tenant as they have “no skin in the game” and therefore no motivation to help a seller show the property to its best advantage
Buyers really love a home that has been fully renovated. However, there are buyers out there who are looking for properties that need work, but this needs to be reflected in the asking price.
How it’s exposed to the market
Almost every home search starts online these days. If the photos aren’t professionally shot, if the property is vacant and not staged, or hasn’t been at least cleaned up, it’s too easy for a buyer to move on to the next listing, even in a market where there isn’t much available.
As for the buyer experience, I’ve worked this fall with several buyers in cases where we were able to negotiate the price down. Negotiating is still possible even in a hot market!
I represented a buyer on a property that was priced for multiple bids, but our offer was the only offer. The sellers weren’t prepared to accept list price, so we went in above asking, based on recent sales. My buyer feels they bought it at a fair price and is very happy they didn’t have to compete.
Generally, the fall has been slower than what we normally see. The September federal election contributed to the slowdown in that people were in a bit of a holding pattern, waiting to see what and if anything would changed.
August was busier than usual but now I’m feeling that the 2021 housing market is sputtering to an end. Buyers don’t seem as driven at this point and fewer listings are coming to market, though I did just bring a unit to market on Grand Trunk and another at 160 Frederick!
What will the rest of 2021 bring? I think we’ll see a trickle of new listings hitting the market and the homes that bring in multiple bidders will continue to be those in established neighbourhoods that tick all the boxes, including being fully renovated.
If you’re thinking of making a move, there are a lot of good reasons to list your home in winter – which is the topic of my next blog!