I know what you’re thinking: “That can’t be true.”
And it is, even though it isn’t.
Because for any property that comes onto the market without an actual offer date posted on MLS, the offer date, is now.
The offer date is asap, because properties are selling in mere minutes.
We’re one month into 2017, and this is the craziest market I have ever seen…
I was going to try to avoid delving into the “big picture” here once again, at the risk of that getting old, but it’s just unavoidable given where we are.
Because with what’s going on out there in this market, this is about the big picture in Toronto.
What’s going on, you ask?
In short: it’s insane.
Perhaps this line has lost all meaning, given the last few years, but here it is again: I’ve never seen anything remotely like what we’re experiencing.
If you thought that a 17.2% increase in the average Toronto home price, from 2015 to 2016, was significant, then try this on for size: Every property in Toronto went up 3-4% as soon as we turned the calendar to 2017.
And some might argue that 3-4% is conservative.
Because there are properties out there – both houses and condos, that literally went up 10% in value from December 31st to January 20th.
That is where we are in the market.
That is, “what’s going on.” Well, in short.
So at the risk of jumping around too much here, let me go back to the “big picture” discussion again, for a moment.
We talked a lot on TRB throughout 2016 about the lack of available inventory in Toronto, the massive decline in active listings, the fact that many people are “trapped” in their homes and not selling, and that overall, there is far less supply than demand.
“Less supply than demand” sounds like a massive understatement.
This isn’t like a popular vote that goes 51/49, one way or the other.
We’re talking drought.
To put things in perspective, take Wednesday’s new listings.
If you’re looking to buy a 3-bedroom home for under $1,000,000 on the east side, and by “east side” I mean anywhere from the DVP, to O’Connor, to Victoria Park, to Lake Ontario, guess what the “selection” is like out there? Today, we saw four houses listed in E01, E02, and E03 that were under $1,000,000, and I would guess that only one of those four houses, once offers are reviewed, will sell for under $1,000,000.
And how many people do you think are looking for a 3-bedroom house, under $1,000,000, “on the east side” right now?
It’s just crazy.
And once you get out into the marketplace and see what’s going on, it gets even crazier.
I predicted back in August of 2016, accurately, as time has now shown us, that we would start seeing “offer dates” on condos.
The fall showed us that the rare, sought-after properties would have “offer nights,” not so much out of greed, as people would like to believe, but rather out of necessity. Listing a $449,900 hard-loft in an 80-unit building, where nothing has come up for sale like it in 12 months, with offers any time, would be short-sighted, given the demand.
The bears, the haters, and the eternally-frustrated will say, “Oh yeah? Why is it short-sighted? Why not just ask what you want, and be happy if you get it?”
Honestly, if you’re asking that, then I can’t help you. So I won’t even address it.
As the fall market went on, we started to see more and more condos with offer dates; some condos that weren’t even really all that popular six months earlier.
But as soon as January started, the market changed in a way I’ve never seen it change before.
EVERYTHING had an offer date.
And as I said somewhat cynically, and truthfully, at the onset – those properties that didn’t have a set time and place for offers, in the traditional sense, were basically taking offers one split second after the listing hit MLS.
Mind you, I’m not talking about the “junk” out there.
I use this term often on my blog – the junk, and I’m referring to pre-construction, assignment sales, units in occupancy, re-lists, tenanted piles of garbage, and over-priced jokes. Some of those are interchangeable. And then on top of all of that, we have location, and I’m sorry – as hot as the market is right now, I don’t think a condo at 4K Spadina Avenue qualifies as a “hot listing.”
So eliminate the junk, and honestly folks, just about every condo out there is selling within 72 hours.
Many of them are selling in mere hours, and that is what’s so crazy about this market.
We’re used to this pace with houses; we all know the drill.
A house is listed for sale on Wednesday, and offers are reviewed next Tuesday evening.
In recent years, the bully offer has taken over our world, and suddenly there’s no guarantee you’ve got six days to see the property and make up your minds; suddenly, you need to see the house on the very day it hits the market, just in case a bully offer comes in, and the offer date is moved up.
Probably 30% of “hot listings” for houses in the central core are selling via bully offer right now, and that just throws the housing search into utter chaos.
Offer dates on condos was one thing.
But bully offers on condos? Really?
A colleague of mine has, in the space of two weeks, with the same client, shown three King West condos, all with offer dates, all of which sold via bully offer.
Imagine the client?
Losing in three bidding wars – that’s rough.
Losing in three bidding wars – all within 48 hours of the listing, since a bully offer moved up the “offer night?” That’s tough to swallow.
And the condos that are listed with no offer date are selling even quicker.
Last week, another colleague of mine spotted a new listing at 66 Portland Street that hit MLS, let’s say, around 11:00am.
He called his client, told her about it, and booked a viewing for 3:00pm that day.
So picture this: he’s driving downtown to meet her for 3pm, and when the light turns red and he comes to a stop, he checks his messages. And there at the top of the pile is an absolute dream-crusher: “66 Portland SOLD FIRM, no more showings.”
“The goddam property sold while I was on my way there in my car!” he told me once he returned back to the office.
“How the F*** are people supposed to buy in this market?”
I listed a condo this week in a building where exactly 4 of the last 51 sales, over two years, have gone over the list price.
My first showing was booked for 11:00am, and by 11:07am I had a registered offer.
I had a 1:00pm showing, and by 1:45pm, I had a second registered offer.
We have an offer night set for next Monday. (And folks, I’ve told you for years that I hate the “offer night,” but it’s a reality of the market – so don’t shoot the messenger here, plus, we’ll talk more about this in a blog post to come next week)
But even with the pretext of an offer night two people rushed to get their clients in to see the unit, and registered offers just to get their foot in the door.
Whatever price this unit fetches will obliterate any record in the building.
To be fair, I listed it how I always list units – fixed up, cleaned up, staged to perfection, and marketed to the max.
But even the crummy condos with no photos are getting offers; offer(s), plural.
Often in this market, it seems, we’re in a race to see who can get in to see the property first.
Where there’s no offer date, you’re looking to submit something at full price, and push the listing agent to take it before competition ensues.
And where there is an offer date, you’re looking to submit a bully offer that catches the market off guard; some buyers have yet to see the property, and some have seen it, but can’t act quickly enough to get their offer on paper.
Reading all of this, you’re probably experiencing a wide range of emotion.
Shock? Yes, if you’re not in tune with the market.
Fear? That’s natural, if you’re a buyer, or about to become one.
Frustration? No doubt about it, but buyers and sellers are just as frustrated in a depressed market.
Concern? Sure, what red-hot market doesn’t come with concern.
Anger? Yeah, that’s fair too. Just remember that it’s an open market, made up of buyers and sellers, and supply and demand is to blame, not greedy sellers, and evil agents.
Confusion? Yes. Absolutely, now we’re hitting the nail on the head.
This is absolutely, positively, the most confusing market any of us have ever seen.
We have properties with offer dates, properties without offer dates, bully offers, listings that say “no bully offers” that still receive bully offers, since there’s nothing to stop somebody from submitting one, and listings that say “no bully offers” that actually sell via bully offers, since it’s up to the seller in the end.
The prices are continuing to increase, it seems, as fast as last-year.
And January left us with the lowest inventory, I’m guessing, in the past ten years. The TREB numbers should be out by Friday, so we’ll know for sure.
Folks, buying and selling real estate is emotional, so the short list we’ve compiled above is not surprising.
But we’re in the most complicated market I have ever seen, and we’re learning new lessons daily.
So if you’re a buyer in this market, just remember: every property that hits the open market has an offer date.
The tough part is figuring out when that date is, and how you’re going to use it to your advantage…