21 Jul A summer market shift
I am starting to see the momentum slowly shift back towards the side of buyers during these dog days of summer. This is inline with my previous forecast and advice of snagging the right home over the summer months.
While the amount of new listings are down, so are the number of sales when compared to June in the freehold market. I believe buyers are being less aggressive and some sales strategies I am seeing reflect this view. For example: Instead of holding offers, I am seeing more agents price houses below market value, but not holding back offers. This is to motivate buyers (and agents) to move quickly and submit an offer, only to create a de facto bidding war by stalling the process long enough to get multiple parties involved. Typically the agent would stall the process by asking for a 24 or 48 hour irrevocable. It can be an effective strategy when people are on the fence. Here is an example: 34 Follis Ave
Assessing demand this summer is becoming harder, especially in the higher-end of the market. As such, some of the inventory is sitting on the market longer. Why? Seller’s may have unrealistic price expectations and/or they are getting poor advice on marketing and strategy from their agent. That being said, the entry level condo market is still very hot: last week Art House had a 500 sq.ft condo listing in King West that received 15 offers and over 80 showings. We sold it for well over $1000/sq.ft. Who is still out there looking? The majority of the interested parties were investors or first-time buyers coming through with their parents.
-Nick, July 20/2018