Sitting here in the first week of January, begging for new listings to hit the market for all my buyer-clients, I truly do think there are times when the real estate market is “almost non-existent.”
It’s a cyclical market, and thus there are down times. But I would expect, somewhat naively, that virtually no homes would be sold between Christmas and New Year’s.
As the results prove, I would be wrong.
Is this typical in any real estate market, or just Toronto?
I certainly don’t want to tell the same story twice here, but back on December 16th, I wrote a blog called, “Tis The Season For Multiple Offers.”
I was talking about how the December market is exceptionally slow, and I was surprised to see a couple of houses listed for sale that got multiple offers, and upwards of 118% of the list price.
I detailed three houses, all which sold on December 14th, were posted on MLS on December 15th, and which surprised the heck out of me.
Listings for freehold homes in the 416-area dropped 42.7% from November to December (using 2014 numbers) as I explained in that blog.
December, in my opinion, is a dead-zone for real estate.
A 42.7% drop in inventory, from one month to the next, is absolutely massive!
So once again, we have that risk/reward, and chicken/egg situation, where a seller asks, “Should I take advantage of the lack of inventory, and list my home in December? Or should I realize that because there’s so little inventory – and with the holidays upon us, that buyers aren’t out in full force, and thus list in January?”
Personally, I think January is a better option.
There’s nothing out there right now, folks. If you had your act together, and got on the market next week, you’d have virtually no competition.
Now to be fair, the that’s the same argument we made for December.
But there is one massive difference between December and January, and their respective lack of supply, and that is the holidays.
The holidays, but also the holiday parties, the relaxed mentality, and the vacation people take from life.
There’s no “holiday season” in January. In fact, people are fully aware that they’re “back to the grind,” and thus I feel January is a far better month to sell your home than December.
Now, just because I love being right, and wrong, at the same time, let me tell you what happened this past December…
I say “December is slow,” and I say, “People aren’t focused on real estate over the ‘holidays’ in December,” but would you hazard a guess as to how many homes sold in Toronto between Christmas Eve and New Year’s?
65 buyers, 65 sellers, 65 listing agents, 65 cooperating agents, 65 mortgage brokers, and 65 sets of family/friends were involved in a home-buying process in what is typically seen as a week where very little gets done in any industry, perhaps no industry more than real estate.
So if you’re wondering how this compares to other time periods of the year, let’s take a look.
December 24th to December 11th was one week.
So if we take a random week last year – say, October 19th to 26th, there were 447 sales in the GTA.
If we look at a “peak” week, like May 4th to May 11th, there were 665 sales.
How about a “slow” period, like in the summer? July 13th to 20th saw 443 sales.
What about the dead of winter? What about this slow January I speak of? Even between January 19th and 26th, there were 259 sales.
So yes, comparatively speaking, the 65 sales between December 24th and December 31st were extremely low, but I would have honestly expected that number to be lower!
The most interesting sale I saw during that week had to be for a house in the west end.
Listed for sale on December 21st, 2015, a mere four days before Christmas, the sellers and listing agent were reviewing offers on December 30th.
Yes, the day before New Year’s.
I know it’s a work day, but that seemed like a very strange week of the year to list a house for sale.
And considering the stakes here – it was your classic “under-list for multiple offer” situation, I would have been the first person to suggest that listing the house right before Christmas and Boxing Day, and taking offers thereafter, was a mistake.
So on December 30th, believe it or not EIGHTEEN buyers lined up to submit their bids.
Listed at $495,000, the house sold for $703,000.
The second-highest bid was $698,000, but the listing agent told everybody “This is a one-shot deal, we will take the highest bid, guaranteed,” and he stuck to that.
Of course, there were also two bids of under $495,000, but hey, would the planet be nearly as much fun without a few crazies?
The home was being sold in “as is, where is” condition, and I’m told by a colleague of mine that there were serious structural issues, and there was only 3-inches of space between the exterior wall of the home, and the wall of the property next door. So to do any repairs on the structure, you’d have to tear the house apart and rebuild it from the inside.
Nevertheless, eighteen people lined up to place their bids.
It’s not surprising that eighteen people wanted to bid on a detached house on the subway line that needed a ton of work.
But it is surprising that eighteen people were ready to see the house, evaluate it, decide on it, and bid on it – all in the week of the year when collectively, we humans accomplish the least amount of productivity.
Well, maybe that’s not entirely true. If you count drinking, decorating, wrapping, eating, baking, partying, visiting, travelling, rejoicing, laughing, sleeping, watching, and relaxing, then yes, we’re productive.
Hey, I don’t create these social behaviours and norms, but I sure as hell notice them!
So knowing this, why would any logical seller list their property for sale in this time period? It truly boggles my mind.
But the proof is in the pudding: eighteen offers on December 30th. Shocking. Just shocking.
There were some other rather interesting sales during that magical 24th to 31st week.
11 people bought homes on Christmas Eve-Day.
2 people even bought homes on Christmas Day itself!
Somebody pulled the trigger on a $3,700,000 house in Rosedale the day before Christmas. Maybe that was one person’s Christmas present to him or herself? Or maybe somebody surprised their spouse with the gift of a lifetime?
One house, languishing on the market for a half year, sold two days after Christmas.
And then, there was yet another Toronto Community Housing Corporation property that sold in yet another bizarre way.
All the TCHC sales have been curious.
But it’s government. Would we expect anything less?
So here we have a significant asset, owned essentially by the tax-payers, and the disposition of the asset should be handled in the best way possible, to maximize benefit to those tax-payers.
So what happens?
The house is sold on December 24th – the day before Christmas.
$825,000 list, double-digit offers, and a sale price of $1,135,000.
Like I said – I can be right and wrong at the same time.
I think it’s absolutely insane to sell a house on December 24th, especially if you’re doing so on behalf of the tax-paying public, who should be held in the highest regard.
But the house sold for a huge price. So I’m wrong. Period.
Another TCHC house was sold on December 29th. This one was ridiculous – listed at $975,000, and sold for $1,506,000. The sale price is insane, if you guys know which house this is, you have to agree that unless you’re willing to pay a $600,000 premium to back onto a park, then perhaps the bidding got out of hand.
All these sales, and all these multiple offers.
And all of this, between December 24th and December 31st.
Tell me that I’m over-stating the significance of this week if you want to. But I honestly don’t think that I am. It’s a week with two statutory holidays, and a week when most people relax.
And yet, the Toronto real estate market keeps on moving.
Does our market ever take a vacation?