It Just Feels Different Out There Right Now
Is it just me, or did things get super quiet this week?
I just came from a showing at a 1000 sq ft unit two blocks from St Lawrence Market. Listed for $699k and holding back offers (as is the norm in 2017). I expected to see a stack of business cards on the counter from agents who dropped everything to bring their clients to take a look before anyone else, barricading the door, making sure nobody else could step foot inside while their clients threw numbers in the air about how much to offer. In fact, not two weeks ago, I was at a similar showing in the same neighbourhood and there was literally a line of agents in the lobby waiting with their clients. Like a club. Kinda gave me a flashback to my clubbing days. Anyone remember Meow Nightclub? Man, I loved that place. Back to the point Adil! The unit had been on the market for 3 days and from chatting with the concierge, there hadn't been too many showings. It was nice enough, spacious, high ceilings, well taken care of. I had the key for almost an hour and didn't see anyone in the lobby when I left waiting to get in. Granted, it's a Friday evening but trust me, so far in 2017, if there's a listing on the market, you see it. Any day, any time. Before it's gone. And 100% of the time, there is an offer date with offers flowing in by the minute.
"This is exactly what a market does to balance itself."
But here's something curious that's been happening this past week. Units are actually not selling on offer night. This was unthinkable as recently as two weeks ago but I've seen a whole bunch of units that had offer nights this week get relisted the next day at higher prices, with offers being accepted anytime. Does that mean these units didn't get any offers? Possibly. But what is more likely is that any offer that the seller did get wasn't the price they expected. Why? Could Kathleen Wynne's magical foreign buyer tax have sifted out all those foreign buyers that were the source of all the bidding wars this year? I sincerely hope you don't believe that. In the week leading up to the "Fair Housing Plan" announcement, there were dozens of new listings flooding the market. In fact, on the very Tuesday before the announcement, I saw no less than 22 new units hit the market just in the St Lawrence neighbourhood alone. 22! In a market where everyone was hoping for at least ONE new listing to see, we saw 22 come up in a single day! This is exactly what a market does to balance itself. Sellers saw what other sellers were getting and it was just a matter of time before more and more sellers decided to capitalize on the demand. And the market started to balance itself. Plus buyers are just tired. Tired of rushing to see units the minute they hit the market, and tired of stressing out after they find out there are already a million offers on it.
"Dare I say that the bidding wars in the condo market may be coming to an end??"
I'm not going to waste your time with another government intervention rant and I have no doubt Ms Wynne will take full credit for any slowdown in the market, but things are feeling different than they did during the frenzied market of February and March. Dare I say that the bidding wars in the condo market may be coming to an end?? Will buyers (and their agents) finally get some breathing room? I think we're already staring to see it happen. This coming week there are a whole bunch of units with offer nights and what happens there will be a huge indication of whether or not things have actually calmed down. I'm taking clients to see three units this weekend with offer nights on Monday and Wednesday. Units that would have absolutely received several offers earlier this month. But if these units (along with all the other units with offer nights this week) don't sell, I think we might finally see a more balanced market heading into May. Finally. Maybe when we see a listing next week for $799k, buyers might actually be able to offer $799k without feeling like they have absolutely no shot! I remember those days. I miss those days. But we have yet to see how inflated or realistic these new list prices will be, and whether listing agents start using new tactics to spark bidding wars - like "offer anytime with 24-hr irrevocable" - which is something that is starting to take the place of the usual "any offers to be reviewed on Monday at 7pm". Same tactic, different execution.
And honestly, this could very well just be a temporary stall. All those buyers who have lost out on bidding wars all year might just be taking a breather and unless they've given up on buying altogether, they could be back before we know it. Along with all the crazy bidding wars and bully offers. Markets can change overnight but at least today, right now, it feels a little less frantic.