LACKIE: Seller expectations remain sky high as real estate market cools

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For the majority of my decade in real estate, it has seemed that all one needs to do to sell a house in this town is stick a sign on the lawn and wait for a herd of crazed buyers to appear.

In what can euphemistically be referred to as a “seller’s market,” the imbalance produced by low inventory coupled with strong demand has simply been our reality in Toronto for longer than it hasn’t. And the COVID-19 pandemic has only made it more pronounced.

For the better part of 18 months, the Toronto market has been on fire.

Buyers abruptly confronted by a whole new reality, both in and outside of the home, suddenly found themselves motivated in ways we haven’t before seen, spurring such intense demand that prices shot right up.

Almost overnight, those lucky enough to own property in this city found the value of their biggest asset had substantially increased, and with it their financial landscape.

And after a year of seeing frantic bidding wars on houses that in many cases could honestly be described as objectively unremarkable, it’s a safe assumption that anyone deciding to sell right now is doing so because they too would like to get in on this moment.


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The problem, however, is that the market, while still hot, has cooled since its peak in March. New listings are down, sales are down. The number of showings has slowed, and so too have the number of offers registered, an important metric to capture buyer behaviour.

And it makes sense — at some point something had to give.

We are coming out of the pandemic tunnel. Between availability of vaccine and the province reopening, people are finally feeling some optimism. Most of us are reasonably assured that our kids will be back in class in the fall.

Significantly, prices have now taken affordability to its upper limits. Buyers can only stretch so far, and between the June 1st increase to the mortgage stress test and an interest rate hike all but guaranteed, people need to keep a level head.


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And from where I sit, having been busier than ever throughout this pandemic, the biggest challenge I am facing right now is, for once, not having to coach and emotionally support my buyer clients through rollercoasters of bidding wars and unsuccessful offers.

No, shockingly, the hardest part of my job right now is navigating seller expectations.

When I sit down at listing presentations and present my opinion of value on a property, it is based on my knowledge of the current market conditions and a careful analysis of the comparable sales.

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And almost always, the number in the prospective client’s head is based on the outlier. The house that sold down the street on day one with an offer 40% above-list. The dilapidated shack that didn’t even have photographs attached to the listing yet sold for $1M. What they feel it should be worth.


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It’s hard to convince sellers that, feelings aside, there’s still method to this madness. That banks must still appraise properties before funding the mortgages. That even in this wild time, a property’s valuation will land somewhere within a range (the science, if you will) and anything above that is based on the value a particular buyer ascribes to it and the opportunity it represents (the alchemy).

It is a mistake to bank on the alchemy because there are no guarantees. Especially now that things have tempered somewhat.

It’s easy to get a listing if you promise the sun, moon and stars. It’s entirely another to deliver it.

And that is why we are now seeing so many listings fall flat.

Houses thrown up on MLS, poorly prepared, shoddily marketed. No home inspection. Priced low with an offer date. I am rarely surprised when those houses are relisted a week later with a substantially higher asking price. Offer night came and went with no takers, or at least none willing to spend in line with seller expectations. I am always curious what the agent thinks. Are they surprised? What did they promise their client?

Sellers have had a great run, and all signs point to that momentum continuing once things pick back up again in the fall. But the COVID-related heat that has driven the market this past year is likely behind us now.

If you want top dollar for your home, the market is absolutely still on your side. But it’s important to be realistic. Now is the time to be managing expectations.



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