What a unique little relationship these two have!  It’s just like peanut butter & jelly!

The market absolutely exploded today with new listings and I’m wondering how this is going to affect the equilibrium.

After all, there’s nothing worse than a piece of toast with too much jelly…

But enough about jelly…

Raise your hand if you preferred macroeconomics to microeconomics?  For the record, my hand is raised.

Sitting in a microeconomics course and constantly hearing about “the firm” simply made me long for Tom Cruise with a briefcase.  Oh, I wish I was back in school!

I think every university student should be forced to take first-year macroeconomics just to learn the basics of supply and demand.  And “basic” is about as in depth as I’m going to apply this to the market in the following blog post…

Sitting through our Monday morning meetings in January and February, the story was the same from all the agents that took turns shouting out opinions when asked how the market was: “There’s no product!”

Sales weren’t down, but they sure could have been higher if there was more to sell!

The market was healthy, but it wasn’t in equilibrium.  There was a serious shortage of product across the entire market, be it houses or condos; $300,000 or $1,500,000.

The effect was obvious: prices increased over that of the fall market, and we all know that prices have surged since the same period last year when we were in a “global economic crisis.”

For the past couple of weeks, I’ve been heard saying, “The market is going to explode the day after Easter.”  I feel that the Tuesday after Easter is just like the Tuesday after Labor Day in that they both signal the start of a very busy market cycle.

Yesterday was Easter Monday, and while it wasn’t a “day off” for most people, all our friendly government workers (I’m looking at you, Pete and Galen!) and many people who had the option of taking the day off, did.  I advised all my clients to wait to list their properties until Tuesday or Wednesday of this week.

And it seemed I wasn’t alone!

An “average” day in real estate might see about 60 new listings in the downtown core, comprised of the real estate districts C01, C08, W01.

A “busy” day would see 80-90 new listings.

My colleague, Jess, asked me on Tuesday morning, “Fleming, how many new listings do you predict today?”

I mulled it over, and said, “Eighty-two.”

Well, I was off by a little.  A lot, actually.

There were one-hundred-forty-two new listings on Tuesday.  Cent-quarante-deux!

It won’t be until Wednesday that we find out if this is an anomaly due to the Easter weekend, or if this represents a massive increase in supply as we move into the second leg of the spring market.

Depending on the section of the market you are looking in, the extra supply might not have a profound effect.

But I was shocked to see what happened in Rosedale on Tuesday.

There were four new listings for large houses on prime streets, all on the same day.  That almost never happens in Rosedale.

6 McKenzie Avenue was listed at $3,650,000.

76 Glen Road was listed at $3,795,000.

57 Highland Avenue was listed at $3,950,000.

And 10 Hawthorn Avenue was listed at $4,850,000.

All four of these houses are 5-bedroom homes, and while three of the four houses are a full 3-stories, the other is still a 2 1/2 storey.

I’m sure a Rosedale expert would explain the “extreme” differences between houses on Glen, Highland, McKenzie, and Hawthorn, but to me, and probably to a lot of buyers, these represent very similar products.  Three of these houses fall within an almost identical price point and are similar in lot size, bedrooms, and other features.

Could it be argued that the timing of these four listings will have an adverse effect on their sale prices?

Throw another wrench into the equation – there’s also a new listing on Douglas Drive for $2,195,000.  It’s not comparable in terms of size or price, but perhaps it offers a buyer a “plan B” of sorts.

Could the excess supply in the Rosedale market end up bringing prices down?

Personally, I would have to doubt it.  But from a theoretical standpoint, it should.

I just found it rather incredible that all these listings came out on the same day; the extent of which I don’t think I’ve seen before.

I was rather frustrated by the market in January and February.  There wasn’t a lot of choice for buyers, and the low supply resulted in competition – especially for the ‘premium’ properties.

Perhaps if the market stays in equilibrium, both buyers and sellers can be happy?