When a semi-detached house near Danforth Avenue in the east end sat on the market for three weeks, some first-time buyers likely hoped it was their chance to make an offer without competing against rival buyers.
Not so fast.
The house, with an asking price of $489,000, received two offers on the same day.
A similar story played out for a house in the tony Birchcliff neighbourhood. That house had an asking price of $989,000 and also attracted two potential buyers after two weeks on the market.
It’s a very unpredictable market in Toronto right now, says real estate agent Irene Kaushansky of Keller Williams Advantage Realty, who represented the sellers in both deals.
“Some people think it’s falling apart, which it isn’t,” she says of the market. “Some people think it’s still moving at the same pace it was in the spring, which it isn’t.”
Setting a date to review offers is becoming increasingly less common during this chilly fall market.
Some sellers still want to establish a deadline in the hopes of sparking a bidding war – and sometimes it still works – but the strategy is risky.
Robert Hogue, senior economist at Royal Bank of Canada, says that the sales-to-new-listings ratio fell noticeably in Toronto to 0.48 in September from 0.54 per cent in August.
“The sharp drop in Toronto’s ratio indicates that sellers’ earlier grip on the market has slipped,” Mr. Hogue says in a note to clients.
Ms. Kaushansky and her team had open houses at four listings last weekend.
Traffic was brisk but not overwhelming, she says.
In Mineola, a house with an asking price of $1.4-million attracted 12 groups. That’s a good number for a house in that price range but back in the heady days of the spring it wasn’t unusual to have 50 groups pass through on one afternoon.
She says she tries to educate sellers about the changing dynamics she is seeing.
“We make sure we tell them their offer date might come and you might not get any offers.”
She adds that some potential buyers and their agents were weary of the practice of setting an unrealistically low asking price in the hopes of stirring up competition and were refusing to play along even before the market slowed in September.
But inviting offers at any time doesn’t necessarily mean that contestants won’t emerge, as the two examples in the east end indicate.
Sometimes sellers who are willing to review offers any time stipulate that the offer should be irrevocable for 24 or 48 hours.
That may allow the seller’s agent time to drum up another offer or two.
Of course some potential buyers will refuse to play ball. They may make an offer that’s good for only a few hours and therefore put the pressure on the seller.
Ms. Kaushansky hasn’t seen that tactic yet this fall but it’s more likely to happen the more confident buyers feel.
Tell us what you think: Are sellers losing their hold on the Toronto real estate market?