The Chicken & The Egg

It’s an old riddle, and until Google told us that without a doubt – the egg came first, it kept philosophers busy for centuries.

When it comes to real estate, we still don’t know what comes first: buyers or sellers.

Don’t get me wrong – Google is probably the greatest advancement in technology in our lifetime!  But it can take the fun out of something so simple and innocent, like this riddle!  I was searching for an image like the one above, and every page I went to informed me that “There is no doubt that the egg came first,” and then described how, with scientific proof.

Well, I suppose we could still use the chicken-and-egg riddle to confuse the hell out of kids…


It’s around this time every year that we compare “the chicken and egg” to “buyers and sellers.”

We’re in late-August, the week before Labour Day, and this is the slowest week of the calendar year, outside of Christmas & New Years.

Labour Day represents a serious changing of the guard.

It’s not the official end to summer (that happens Sept 21), but it may as well be.

That ‘feeling’ you get when you step outside on the Tuesday after Labour Day – that feeling that the summer is over; it’s unmistakable.  It’s about 3-4 degrees colder, the lawns have dew on them, the neighbourhood children are like lemmings walking in a line, heads bowed in disappointment, back to school.

Nobody likes hearing the words “summer is over,” but it’s unavoidable.  It happens every year.

Well, I say nobody likes the end of summer, but perhaps Realtors do.  And for those buyers looking aggressively at house and condos, maybe there’s a decent trade-off between the end of summer and the beginning of a fortuitous housing search.

The real estate market is non-existent this week.  There were only 23 new listings downtown today, which comparatively, when the market is in full swing, likely gets 100 – 140.  But why wouldn’t the real estate market be non-existent?  It’s slow as hell!  It’s the week before Labour Day, and only days before the long weekend!

What kind of buyer would be actively looking right now?

What kind of Realtor would be working on anything but his or her golf swing?

And what kind of seller would put a property on the market when nobody is around to see it?

If it sounds like I’m making a circular argument, it’s because I am.

I can sum up everything I said in two points:

1) Buyers don’t look aggressively until there is ample product on the market.

2) Sellers won’t list until the buyers are out in full force.

Do those two points contradict each other?  Or complement one another?

What came first: the chicken or the egg?

As I’ve been telling all my active buyers for the past three weeks, the market in August is exceptionally slow, as most sellers are holding back their listings until the busy Fall market.  They’d be foolish to list now, when most buyers are only casually looking at real estate, if they’re not spending every weekend at the cottage.

One of my clients said, “Okay, we’ll I’m willing to aggressively look!  If it means getting a deal, getting the dream home, or just getting something I don’t have to overpay for – I’m willing to pound the pavement every day!”  I told him that while I applauded his committment and work ethic, it wasn’t feasible to “aggressively look” when there’s nothing to look at.

Picture yourself walking into a store pushing a giant shopping cart, but seeing next to nothing on the shelves.

That’s August in real estate, and it’s as a result of sellers waiting for the buyers.

But the buyers are waiting for the sellers.

And why is that?

Well, because the sellers are waiting for the buyers.


Who started this circular war?

The two players in the game – buyers and sellers, depend on each other.  And to be honest, I don’t think you can define “who started it.”  I think all we know for certain is that each party puts their plans on hold waiting for the other.

I’ve seen a couple of sellers try to buck the trend and list their homes for sale last week (with a hold-back on offers, of course!) but as I expected, none of these homes sold.  I believe you only get one chance to make a first impression, and these sellers have shot themselves in the foot.  They should have waited until September, although I suppose I applaud their risk-taking.

What makes a “busy market” is not just the presence of buyers, sellers, or both, but rather the interaction between them.  A market wouldn’t be busy if sellers were flogging their wares unsuccessfully, and buyers were keeping their wallets firmly entrenched in their back pockets.

It’s no coincidence that the months with the most sales are typically March/April/May and September/October, as these are the “busy periods.”

They’re also the two periods with the most listings, and as a result, most buyers will target these two periods to aggressively search the market.

So I ask again: who came first, buyers or sellers?

Nobody comes to me in the first week of December and says, “David, we’re ready to buy our first home!  We’re excited, and eager to get started!”  And if they did, I’d probably reply, “Great, let’s use the next month to get financing in order, consider price points and locations, maybe look at some historical sales to give us an idea of what to expect, and then come out of the gates running in mid-January!”

You can’t be a buyer if there’s nothing to buy.

And you can’t expect to sell if there’s nobody looking to purchase.

A lot has been made of this “summer lull” we’re in right now, and while I’m not one for predictions, I think there’s a 50% chance that this summer lull continues into the Fall, and we see a bit of a slowdown from where prices/sales were in the Spring, and there’s a 50% chance that the first “great” house in Riverdale, Leslieville, Roncesvalles, Bloor West, and the other hot spots sells with twelve offers for 125% of the asking price, and we’re right back where we started.

But I also think that the first week of September will be a “feeling out period” for sellers and buyers alike.  Sellers won’t know what to expect, and we’re going to see some crazy things – like sellers listing at $899,000 expecting $1,000,000, and not getting a sniff at $899!  It happened in the spring when the market cooled, and I think sellers had better strategize before listing, so they don’t end up reacting to what the market gives them.

As for buyers, patience might be a virtue.  If the first three weeks of September prove slow, perhaps there are deals to be had in October.

Or, prices could continue to rise and maybe the average house price will break $600,000 next year.  Wouldn’t that be something…

Only one thing is for sure: new listings are going to skyrocket starting Tuesday, September 4th, and I expect to see triple or quadruple what we’re seeing right now.

The buyers will have more choice, but there will be more competing buyers to contend with.

The sellers will have more buyers to appeal to, but they too will have competition from their neighbours across the street and down the block.


It shouldn’t be.

The egg came first, remember?

So in this analogy: who is the egg?


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  1. Devore says:

    According to economic theory, seller comes first. Production comes first. You cannot buy what is not produced and made available for sale. From a more practical perspective, in real estate there are always sellers who have to sell, buyers never have to buy. Seller will step forward first.

  2. Havoc says:

    Great post!