Frustrating Fall!

Frustrating Fall!

Opinion

10 minute read

September 23, 2020

From the very moment my daughter learned the word “frustrated,” it was apparent that she was going to use it in every situation possible.

While it began as rather cute to hear a 3-year-old say, “Daddy, I’m frrrrustrated,” I feel as though it’s also gives her an excuse for every single action she can’t explain since then.

Sure, more often than not, it’s a valid explanation for what she’s doing and feeling.

Tired from a long day, trying to fit that piece of lego onto the castle, then having it slip off and break down the whole east-wall of Lego Manor?  “Daddy, I’m frrrrustrated.”

That’s totally fair, but when we’re driving in the car and you decide, out of nowhere, that now would be a good time for a sprinkle-donut from Tim Horton’s, and I say, “no,” that’s not exactly the same thing.  You’re not really frustrated, but rather you’re choosing to become frustrated.

I see a distinction.  My child does not.

Nevertheless, she’s constantly “frrrrustrated,” and often points to other children at the park who’s behaviour she believes must be borne of frustration as well.

My daughter is almost 4-years-old now and I feel like many other emotions get confused for frustration.

Disappointment.  Fatigue.  Impatience.  Loneliness.  Discouragement.  Rejection.  Jealousy.

These are also all emotions that buyers and sellers are currently feeling in different areas of the Toronto real estate market, and as is the case with my daughter, buyers and sellers are all feeling various levels of frustration as a result.

I wouldn’t tell my daughter, “You have no right to feel frustrated,” but it doesn’t stop me from thinking it.  Just because she wants a donut and can’t have one doesn’t mean she’s truly feeling frustrated.  By definition, maybe.  But I think that frustration is self-inflicted.

Once again, I see the parallel here with the Toronto real estate market, as unrealistic expectations on behalf of buyers and sellers are leading to disappointment, which of course, leads to frustration.

Jealousy leads to frustration too.  So does envy.

Misunderstanding certainly leads one to be frustrated, as does impatience, and fatigue.

In fact, there are a host of other emotions that buyers and sellers that are experiencing right now, all of which have made for an extremely frustrating fall.

I’ve had a few people comment to me, either on TRB or in conversation, that my “tone” on here has changed.

Maybe.

But I’m not bearish on the market.  I remain quite bullish, in fact.  I just acknowledge the slow condo market, which is saturated with listings, and the absurd ups and downs in the market overall.

I also acknowledge perhaps the most emotional market I have ever seen, hence today’s post.

While emotions such as the “joy” of buying a home, the “thrill” of prevailing with a successful bully offer, or the amusement, delight, gratefulness, and love that go into the home-buying or selling process are all present, it’s the difficult part of the market that I want to focus on today.

And with that, I give you ten ways that buyers and sellers are acting, all based on their emotions, all of which leave them frustrated in the end…

1) Regretful

There are oh-so-many examples of this emotion in the fall market, but let me give you one that I never saw coming.

A client of mine sold her 1-bedroom condo for less than expected and was disappointed with the result.  Call me a salesperson here, but I told her that a 44% return over what she paid in 2016, was pretty damn good!

Was it less than she would have sold for in February?  Oh, no doubt.  Much less, in fact.  But it didn’t eliminate that 44% gain which is substantial, leveraged, and tax-free.

But then she told me something that was a little out of left field: “I could have bought any number of units back in 2016, and I’d have done better.”

True, I guess.  But you can make the same argument in many different markets.

She continued, “I strongly considered two other condos when I was looking in 2016, and they’ve both appreciated a much higher rates.”

I told her that when I purchased my condo in 2010, I also sold houses to two of my very good friends at the same time.  I bought a condo at 30-years-old because I was working 7-day weeks, building my business, and I was in no way prepared for the rigours of home-ownership.  I needed to be downtown, living maintenance-free, and with an easy lifestyle.  And when my friends sold their homes and made 150% returns, and I only turned a 112% profit, I never once regretted or questioned my decision.

When the market is at the absolute peak, every seller is happy.  When the market is anything but, it’s time for sellers to look back, and often do so with regret.  While most of that regret is irrational, and often fades within days, it doesn’t stop it from happening.

2) Impatient

There’s no true “easy sale” in our real estate market, even during hot ones.

To obtain top dollar, it takes weeks, if not months of planning and preparation before you list your house or condo for sale.

Whether the market is up or down, the work is required.

The only difference between hot and cold occurs after the listing and to the listing strategy.

If I had a condo listing in February, it meant that after the tenant left on December 31st, we met at the property for a walkthrough, then planned to paint the whole condo, do minor repairs and a few fixes, then stage the place, photograph it, put together appropriate marketing, then list, and wait for the offer date.

It might have taken a month to prepare, but at least we knew when we were going to sell, ie. on offer night.

When you list a property with “offers any time,” you immediately eliminate that one certainty that you knew you had.  Sure, you open the door to an offer on the first day of the listing (although a bully offer could have been received, even for those who set offer dates), but in today’s market, listing with “offers any time” often means you’re pricing higher than fair market value, as a strategy, or, it means you’re unsure of the market.

While some condo sellers are pricing low with hold-backs and “offer nights” (and doing so unsuccessfully…), most are not.  Most condo sellers are then left to wait.  And wait.  And wait.

It doesn’t take long before sellers become impatient, and this fall, I’m seeing that happen around the 7-8 day mark.  Whether it’s a complete coincidence that this is usually around when offer night would be, or not, it shows that many sellers are simply used to this timeline.

Impatience is running rampant this fall.

3) Misled

This is a tough one, and a rare one too.

Picture yourself as the house seller who assumes your home is worth $1,200,000.

You list at $989,900 and hold an offer night, and whether you did things “right” from the onset, or not, the market doesn’t respond, and you don’t get your price.

So you re-list at $1,229,000 the day after offer night.

Crickets.  For a week.  Nothing.

And then after the second week of maybe a showing or two trickling in, anxiety and nerves take over, and you go back to the well: you re-list at $999,000 again.

This time around, on offer night, you sell for $1,100,000.

Think this can’t happen?  You’re wrong.  Because this happened with one particular east-end house that comes to mind, and there are more of that, I’m sure.

These sellers must have felt misled, not only by their agent, but also by the market.

I would like to think that a top agent would have obtained that $1,200,000 price for the seller with better preparation (repairs, cleaning, staging, marketing, networking, etc), but I also think that these sellers would feel misled by the market, and that’s only part of the problem.

The truth is: you never know whether it was the market that failed you, or your agent.  Because the agent is going to tell you, “It’s the market,” and unless you’ve transacted in real estate before, you have no way of assessing that agent’s effectiveness.

All over the city, houses and condos, sellers are listing and then re-listing.  All of them are feeling misled by the market, to say the least, whether it’s the market’s fault or not.

4) Envious

How many times during this pandemic have you fallen into that fantasy about “what if?”

I wonder what my 4-year-old would have experienced, during Junior Kindergarten, if not for a worldwide pandemic.  I wonder if I’d have taken a vacation this summer, or gone to see my brother and his family in England.  I long for all the lost Sunday dinners at my mother’s house; the one place in the world where I feel equally as at home, as in my own house.  How many more swims would my kids have had in grampa’s pool?

There’s no shortage of moments, events, or personal interactions that we would have had, if not for this pandemic.

The same can be said for real estate buyers and sellers out there, who long for an advantage lost due to the last six months.  Whether it was an opportunity to purchase a house or condo that didn’t materialize or a personal happenstance this fall that prohibits a person from doing or achieving what they want in this market, I’ve talked to countless people who would have, but can’t.  Should have, but didn’t.  And now, all they can do is dwell on it.

Condo-sellers are envious of their friends, family, and colleagues who sold in the spring.  House-sellers are being envied by those who already transacted earlier in the year.  And with the up-and-down market in 2020, that’s literally gone up, then down, then up, and now down again (in some segments), it’s impossible not to look at some person, at some point of the year, and be envious.

5) Jealous

How can one not be jealous in this market?

Your neighbour’s house sold, but yours didn’t?  Or they both sold, but your neighbour got more money, or more offers?

Jealousy isn’t envy, by the way.  It’s something worse.

Envy is a little more innocent, but it’s a type of longing.  It’s nostalgic, at times.

Jealousy has more vitriol.  More disdain.  There’s often an element of dislike, or even hatred.

Jealousy, more often than not, contains an element of betrayal.

And just as many market participants have felt misled this fall, they’ve also go on to display some form of jealousy.

6) Discouraged

2020 has been a really, really tough year for everybody.  It’s not just the pandemic.  I think many of us are rattled by what’s happening in the United States, and that’s going to continue well past the election, likely get far worse, and the world as we know it will change, as a result, in 2021.  Many of our kids aren’t in school right now, and those of us that do have our kids in school are worried sick.  We fear for the health and safety of our parents.  Many folks were put on furlough or had their hours cut back, and scores of Canadians are hurting financially.

With all of this in the background of trying to sell a house or condo, how can a person not feel a bit discouraged?

The discouragement that sellers are feeling right now isn’t just related to the pandemic.  It’s everything else on this list.

It’s the media reports which are either bad, when you want them to be good – as a seller, or good, when you’re hoping the market drops, as a buyer.

It’s the house that your agent said would only get 3-4 offers, that gets 12.

It’s the first week of showings on your condo, which resulted in one showing.

It’s your neighbour that sold, when you continue to sit on the market.

It’s everything we’ve discussed, and it’s happening with a pandemic at the forefront, in a world that has become utterly confusing and complicated.

7) Helpless

I’m a control person, no doubt.  I’m obsessive-compulsive, and I’m not good with anything not within my control.

Time is a big one for me.  I hate being late.  I can’t stand when others are late.  As a child, knowing that we had to be home at 5:30pm, but planning to meet at the school at 4:00pm sharp to play box-baseball, I was always frustrated when my friends weren’t there as scheduled.  Looking at my Timex watch, and seeing 4:10pm turn to 4:20pm, I knew that time was ticking away, and we couldn’t get it back.

As a real estate agent, I can’t stand working with other agents who don’t’ know what they’re doing.  I can’t stand that lack of control, not necessarily because it’s not working in my favour, but rather because it sickens me that they’re not doing something properly.

Control is a problem for me.  And it’s a problem for a lot of sellers who feel helpless for a variety of reasons.

Some sellers aren’t getting enough showings.  Some sellers aren’t getting any showings.  Some sellers get feedback they don’t like, or want to reply to, in attempts to show the potential buyer what they themselves see.  Some sellers feel displaced during showing times.

8) Abused

A client called me last week and said, “Somebody just came to my door and said they had an appointment, but the last appointment tonight was from 7:30pm to 8:00pm.”

The problem with this?

It was 8:50pm.

I make no excuses for this behaviour; it’s awful.  For an agent to casually show up fifty minutes late for an appointment, without calling the listing brokerage or the listing agent, and then making the assumption that it’s okay to obtain the key from the lockbox and go inside, is wrong on every level.

However, that seller wants to sell.  And unless that seller is inundated with showings and can simply say, “Go away, I know I’m going to have a dozen offers on offer night,” then that seller might put on his or her slippers, and head outside for a walk that he or she had no intention of taking.

That’s the abuse that some sellers are taking right now.  They simply have no choice but to acquiesce at every single opportunity, because they need to sell.

9) Reflective

Here’s a positive one!

And this is all about perspective.

Everything I’m talking about today traces back, in one way or another, to the pandemic.  The envy we feel for people and places both before and after the pandemic has made many of us introspective and thoughtful in many ways.

When it comes to how we interact in the real estate market, I’m seeing more and more people discuss how they would do something different down the line, as a result of how things are now.  I’m also hearing a lot of stories about “how things used to be,” as though last fall were a lifetime ago.

While there are countless people out there in society today, flaunting social distancing measures, and displaying a level of selfishness that’s going to lead us into the second wave, there are a lot of people who have adapted and who go out of their way to make others comfortable.

I’m seeing that a lot in my real estate dealings, and there’s a new element of thoughtfulness and understanding when visiting other people’s homes, and when attending showings among other buyers, that wasn’t present before.

10) Perplexed

Imagine bidding on a house amid 12 offers.

Then imagine your real estate agent telling you that it’s going to be really, really tough to sell your property because you own a 1-bedroom condo in an older building.

That’s the conversation I had with a client on Tuesday night, as we lost in a 12-offer frenzy on an East York bungalow, when all the while, I keep telling him that he needs an extra-long closing on the house purchase so we can ensure we sell the condo!

Imagine being involved in one area of the market that’s red-hot, and one that’s ice-cold.

How can you not be a little perplexed?

“Confused” is a good word, and one that I might have used next.

There’s just no continuity in this market, at times, and it’s leaving some buyers and sellers perplexed.

One night, a house gets a dozen offers.  The next night, a similar house only gets four.

As a buyer, how do you make sense of this?

The market is confusing, and at times, absolutely perplexing.

So there you have it, folks!

Perhaps I’m the one being reflective today, as I detail the emotional journey that buyers and sellers are experiencing this fall.

But it’s tough out there.  Really, really tough.

The lack of continuity in the market is what’s throwing buyers and sellers for a loop, and there are just no two deals the same.

One minute, you’re scraping and clawing to get a complicated deal done, and the next minute, you’re watching your buyer-client getting blown out of the water by an offer that’s obliterating the previous record.

Who said this fall would be uninteresting, right?

Written By David Fleming

David Fleming is the author of Toronto Realty Blog, founded in 2007. He combined his passion for writing and real estate to create a space for honest information and two-way communication in a complex and dynamic market. David is a licensed Broker and the Broker of Record for Bosley – Toronto Realty Group

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31 Comments

  1. Ed

    at 8:37 am

    I’ve been watching W08 closely and it seems that entry level (bungalows) are starting to sit when 3 months ago they were on fire.

    1. Bal

      at 12:00 pm

      I guess house prices pushed so high even low-interest rates are not making difference…

    2. Zarks

      at 4:54 pm

      W08 is pretty big, depends on which part.

  2. Karolina

    at 12:28 pm

    I agree with many things that you are observing right now. Market is slowing down. I see it in C02/C04 and C09 and up near where I live Richmond Hill/King City/Aurora. These are the areas I am following…I posted a comment about this a few weeks ago….
    Based on the economic situation I don’t see it getting better in the next few weeks. Interesting that it is slowing down even though the interest rates are the lowest they have ever been. Sellers of condos should be more realistic and open to selling at a lower price than last year. I have been renting my properties for over 15 years. This is by far the slowest and least amount of showings that I have seen personally. However, having bought many condo units years ago, there is substantial equity build up. Wondering how many other investors who are just closing on these new condos and will get a rude awakening to the fact that rent prices have to be discounted by more than 20% in some cases to even get a good tenant. Interesting times ahead indeed! Perhaps this will teach many people that real estate is not always hot, which has been the case for so many years.

    1. Jimbo

      at 1:29 pm

      One thing you can count on is downtown offices are worth far too much to allow WFH to be a thing much longer than a year. There will always be a demand in the central core for condos and housing. Even if it looks a little bleak right now.

      1. J G

        at 9:33 pm

        How do you know that WFH (even at less capacity at say 2-3 days a week) will not be permanent?

        I think there’s a good chance it will be.

        But I’m not arrogant like some other poster here and say it will for sure happen, or “condo will go to zero”.

        1. John g

          at 11:50 pm

          Organizations are constantly in changing and adapting, and seeing what works and what doesnt. Management will eventually tire of wfh when they start to develop sophisticated metrices to accurately measure employee productivity and they will find that by and large we just arent as efficient or innovative when we wfh. Some are, but the majority arent. Office space isnt going anywhere, its just on pause.

          1. Chris

            at 10:36 am

            “SELF-STYLED visionaries and people particularly fond of their pyjamas have for decades been arguing that a lot of work done in large shared offices could better be done at home. With covid-19 their ideas were put to the test in a huge if not randomised trial. The preliminary results are now in: yes, a lot of work can be done at home; and what is more, many people seem to prefer doing it there.

            This says that home-working is actually more efficient than office-work, and that the glory days of the office are gone. The office, after all, came into being when the world of work involved processing lots of paper. The fact that it remained so dominant for so long may instead reflect a market failure. Before covid-19 the world may have been stuck in a “bad equilibrium” in which home-work was less prevalent than it should have been. The pandemic represents an enormous shock which is putting the world into a new, better equilibrium.

            Since the 1970s researchers who have studied physical proximity (ie, the distance employees need to travel to engage in a face-to-face interaction) have disagreed on the question of whether it facilitates or inhibits collaboration.

            Such uncertainty is exemplified by a study in 2017 by Matthew Claudel of the Massachusetts Institute of Technology (MIT) and his colleagues… they found little statistical evidence for the hypothesis that “centrally positioned, densely populated and multi-disciplinary spaces would be active hotspots of collaboration”. In other words, proximity can help people come up with new ideas, but they do not necessarily need to be in an office to do so.”

            https://www.economist.com/briefing/2020/09/12/covid-19-has-forced-a-radical-shift-in-working-habits

        2. Appraiser

          at 10:01 am

          Major Indexes month to date for September, 2020.

          Dow Jones -8%
          Nasdaq -12%
          S&P 500 -10%
          TSX -10%

          Tell me how those FAANG stocks are doing again?

          “The air keeps coming out of the tires.

          A market that rode hard all summer on the FAANGs and semiconductors is making a loud hissing noise as those high-flyers lose traction.

          All summer, investors heard warnings that if Tech’s party settled down, the broader market would take a hit. September reminds us of that as it appears on track to be the first losing month since March and the worst month of September in 18 years.”

          https://www.benzinga.com/news/20/09/17631283/faang-stocks-apple-amazon-netflix-alphabet-lead-broad-wednesday-selloff

          1. Chris

            at 10:31 am

            Month to date? Why not week to date? Or returns for the past 8.3 days? As for how those FAANGs are doing, NASDAQ YoY +31.07%; so still pretty well.

            But uh oh, Benzinga says the air is coming out of the tires! What does The Motley Fool think? And quick, someone check on Zero Hedge and other obscure investing blogs, we need to know where the market is going! Some bear with his hair on fire is suggesting it’s going to zero! Again!

          2. J G

            at 2:45 pm

            Did you buy any old man? Because when it bounces back up like it always will, I’ll just make more.

        3. Jimbo

          at 5:30 pm

          I can see a transition to 2 or 3 days a week from home for a year or two. From there it will depend on company productivity.

          I also have a hard time believing companies will pay a lot of money for space not being used. I don’t see them moving to a cheaper suburb location as it could displace too many workers on the wrong side of the city.

          If WFH becomes a serious forever thing what do you do with all that business land and list city revenues?

  3. Appraiser

    at 3:41 pm

    I live in a detached.

    I guess our time is coming.

    Condos are going to zero though. I read it somewhere.

    1. J G

      at 9:28 pm

      I’m sorry, who said condo is going to zero? Can you provide the link?

      1. Appraiser

        at 8:05 am

        Some bear with his hair on fire. Again.

        1. Bal

          at 10:56 am

          Oh and I thought Appraiser is predicting that Zero scenario…lollol

  4. Appraiser

    at 8:27 am

    Had the Prime Minister arrived at the podium last evening on angels wings holding a vile of Covid-19 vaccine that he had invented in his spare time, the Conservatives would not have supported yesterdays budget.

    What part didn’t they like:

    Extended financial help, along with jobs and skills training for the unemployed?

    Expanded child care?

    Investing in the perhaps soon to-be-closed Oakville auto plant saving 4,00 jobs, to build 5 new electric vehicles and their batteries? https://www.thestar.com/politics/federal/2020/09/20/ottawa-offering-500m-to-bring-electric-vehicle-production-to-fords-oakville-plant.html

    Or do they still obsess about socks, selfies and some charity than no one gives a shit about?

    Come on O’Toole – as the new leader, let’s raise the level of debate. Let’s do the best we can for those who are hurting during this pandemic. Please?

      1. Libertarian

        at 1:47 pm

        It’ll be interesting to see what impact, if any, real estate taxes have on the market. But it’ll take years, if not decades, for that to play out, so we won’t be able to talk about it on this blog at that time. Unless of course, David is still going at this. For his sake, I hope not. Ha!

        1. Chris

          at 2:53 pm

          I think it’ll hinge on what shape taxes take. Hard to speculate, as nobody knows if they’ll set a lifetime maximum on the capital gains exemption from your principal residence, implement a land value tax, or something else. I guess we’ll find out when Freeland presents the budget!

      2. Appraiser

        at 7:50 pm

        Nothing but anger & negativity from O’Toole; or the rest his sad-sack party.

        A guy whose motto is “through adversity to the stars” ?

        Sound realistic, or like something Buzz Lightyear might say?

        Yikes!

        1. Chris

          at 8:22 pm

          Yes, yes, we get it, you love Trudeau.

          Partisan hacks of any stripe are so off putting.

          1. Fearless Freep

            at 10:00 pm

            Or perhaps it’s the Liberals’ policies that he generally likes. And the Tories’ policies that he generally dislikes. That doesn’t make someone a “partisan hack.”

          2. Chris

            at 10:25 pm

            Then comment on the policies you like or dislike.

            Calling the entire party “sad-sacks”, writing off O’Toole’s criticisms as “anger & negativity” and “obsessing about socks, selfies”, and dismissing the WE Charity scandal as “some charity than no one gives a shit about” smacks of a partisan hack.

            I voted for Trudeau, but he’s not infallible nor immune from critique.

    1. Bal

      at 8:18 pm

      This news was flashing today at CP24…Moody’s Analytics, Inc. says home prices across Canada could tumble about seven per cent in 2021, as unemployment dampens the hot real estate market.

      I am sure you all must have read this news

      1. Kyle

        at 8:36 pm

        Moodys’ literally knows nothing about real estate. Going to Moodys as a source for real estate analysis would be like going to The Onion or The Beaverton as your source for news.

        1. Bal

          at 8:58 pm

          I just shared the news…if moodys know nothing why they are still in the business ????

          1. Kyle

            at 10:31 pm

            Their business is providing credit ratings for bonds. Real estate isn’t their business.

          2. Chris

            at 11:47 pm

            You’re confusing Moody’s Analytics for Moody’s Investor Services. The latter is in the credit rating business; the former provides economic forecasting, risk management services, regulatory compliance advice, etc.

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