Honest to goodness, when I started writing this one the week before Labour Day, I had no idea that it would end up being dragged out over three successive posts!  That should tell me just how little I know myself these days…

These five topics are too important and too complex to explain, predict, and discuss in 200-300 words each.  I do a lot of online reading, and one of my biggest pet peeves is an article about an important and/or complex subject that merely adds ten or twenty words to a bolded headline or bullet point.  This is especially true of personal finance and real estate.

Everybody out there has an opinion, after all.  And while many are just fishing for clicks and redirects, people still read it, whether it’s good or not.

The fall real estate market is going to be epic, and that’s going to help and hurt a lot of people.  The market will be further impacted by a host of external factors, and the lack of predictability this fall is as high as any fall before it.

So, yeah.  I’m not worried about brevity here.

My fourth “burning question” is somewhat tied to my second, which was somewhat tied to my first.

That will be a reoccurring theme this fall, trust me.  Our market is an epic playset of the early-1990’s “Domino Rally,” and some of the playsets will simply contain dominoes that get knocked down for good, whereas some will complete the loop-de-loop, and some will launch a rocket…

4) Have the condo market and the freehold market in the 416 finally decoupled?

Yes.  It seems that they have.

So this isn’t really a question, per se.  Although some might argue over the definition of “short-term,” so perhaps we should ask this as a question, then answer it with stats that I’m pretty sure we have on hand.

Can I tell you a story?

In July of 2011, I sold a condo to a young couple for $333,000.  It was an awesome spot on the east side in a building I love.  It was listed at $349,000, and we signed it back twice and negotiated down to $333,000.  That was the market at the time.

In November of 2015, the clients put the property back on the market at $399,900.  It was a bit higher than the comparable sales, but a buyer-client of mine expressed interest and said they were happy with the price, and we did a deal.  I have worked in multiple representation very few times in my career, but this was one of them.  It was 2015, and this was the market at the time.

In October of 2019, those clients went to sell.  Listed at $549,900, we sold for $660,000, amid 13 offers.

Let’s compare the two returns.

Clients A owned the property for 4 years, 4 months, and made a 20.1% return, or about 4.6% per year.

Clients B owned the property for 3 years, 11 months, and made a 65.0% return, or about 16.6% per year.

Ignoring the idea that the first clients undersold, or the second clients oversold, can we compare these two returns, please?

You see, this is how I view the condo market in the past ten years.  People who owned from 2010 to 2016 made a return, but people who owned from 2016 to 2019 absolutely killed it.

Amazingly, TRREB didn’t publish the stats we’re accustomed to seeing today, back in 2010, or even 2011.  So starting in January of 2012, let’s compare some data sets, shall we?

First, let’s look at January of 2012 through the end of 2016, and compare the TRREB average sale price, which incorporates all property types, in all regions (including some that you wouldn’t expect to be hot), versus the 416-condo market:

First of all, not a shabby return, right?  A whopping 57.6% average inside of five years.

But more importantly, this is all TRREB districts, including Toronto, York, Halton, Peel, Durham, Simcoe, and Dufferin.  So the average incorporates the sale of cottages in Keswick and ramshackles in Scugog.

And yet, the return absolutely dwarfed that of the proud 416-condo, outpacing it more than 3-to-2.

So now let’s move ahead to January of 2017, and this time we will compare the average prices to the “peak” of our market, pre-pandemic:

To channel my inner Ross Geller, could there be a bigger difference?

This time around, not only is it the 416-condo in the lead, but the average return is TRIPLE that of the GTA.

My example above about the two sets of clients and their returns may have seemed absurd, but the stats prove that this was the market from 2011 through 2020.

And now?  Moving forward?

Well, we’ve already seen the post-pandemic pricing play out in favour of some property types, and at the expense of others.

Perhaps a refresher:

Now let me defend the 3.5% drop in 416-semi prices, since this was at $1,287,832 in June, so I think August was just an off month.

In any event, freehold is massively out-pacing condominium, and I do believe, in fact, that this trend will continue.

This fall, condo prices and freehold prices will become substantially decoupled, if they haven’t done so already.

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5) What’s the competitive advantage?  How do you get your property noticed?

This question might not be on the minds of the average house or condo seller, but it should be.

And if any agent in this market is worth his or her salt, this question should be burning a hole in their brain, because this fall, Question #5 on my list will shoot to the top of the list for many, many sellers out there.

I have long maintained that a property doesn’t sell itself.  I don’t want to turn this conversation into a debate about the value of a real estate agent, or commission, but those are the underlying themes when we look at how properties sell, and for how much.  I will grant that, in a red-hot market, a bottom-level agent can sell a house or condo, and often make it look easy in the process, but there’s absolutely no way that the agent gets as much money for the property as a top agent would have.  There’s just no way.

Unfortunately, there’s also no way of knowing this either.  No way of proving it, since you can’t sell your house or condo twice, with two different methods.  So the seller who hires the discount agent, the friend-of-a-friend, or the muddled-middle agent will always conclude, “See?  I sold my place and I got a huge buck for it,” even though that person can never really know what could have been.

As I wrote in last Thursday’s blog, there were almost 200 new listings in the downtown core on Tuesday, which was the first day “back” after the long weekend, and the first day of the fall market.

Many of those listings, even good ones, are going to get lost in this market.

I’m sorry, but in this fall market, the crap isn’t going to move.  Not easily, at least.

I received a call from a blog reader on Friday who said her condo was up for sale with another agent, and had been so since July.  She asked me, “What can you do for me?”

The first thing I told her was that I was going to be as blunt and as honest with her during that conversation as she’s grown accustomed to from reading my blog.  Then I dropped a bomb on her when I told her what I could do for her, right then and there:

“Nothing.”

See?  Honesty!

“I can’t wave a magic wand,” I told her.  “You don’t get a second chance to make a first impression, and I can’t simply pick up after there’s been damage done.”

This is a condo in the most difficult part of the market: entry-level.

Unfortunately, it also falls into yet another difficult part of the market: older building.

This condo has been languishing on the market for two months, and with absolutely nothing to lose, and this being my final call of the day, I was so blunt that I was surprised she didn’t hang up.

“There were a lot of mistakes made her,” I told her.  “So let me walk you through this, as I would if this were a listing on my blog,” I told her.  She agreed, and listened.

“You priced too high,” I told her, and she agreed immediately.  “The price you came out at was never going to work, and while I recognize that a similar unit sold the same month rather quickly, you priced $30,000 higher, for some reason.  I know your unit is marginally larger, but if overlooks a major city street.”

Hindsight is a bitch, but what else was I to do?

“You also didn’t recognize what was happening in the market and adjust on the fly,” I told her.  “I spent all of the summer writing blogs about the condo market and providing statistics, and you say you’re a reader.  So why didn’t you adjust?” I asked.

They did adjust, but it was too late.  A price drop, for an over-priced condo, one month too late, in a saturated market, doesn’t do anything.

Look, I don’t want to sound abrasive here, like I’m tooting my own horn, but how many agents out there do you think crunch numbers on listings and absorption rates on a regular basis?  Let’s see, myself, Lord God John Pasalis, and, um…….hmmmmm….

To suggest that this blog caller’s agent should have been more in touch with the entry-level condo market and what was happening with massively inflated levels of inventory would be naive, and ignore just how many clueless agents are out there.

What should have been done in July, wasn’t.  What could have been done in August, also was not.  So what can be done in September?

“Take the property off the market,” I said.

“How many showings have you had on this unit?” I asked.

“We had three in the first three days,” she said.  “But none in the last three weeks.”

“You need to take this unit off the market for a month,” I told her.  “There’s just no way to trick or fool the market right now.  You need to put space in between a failed listing and a re-launch, and that can’t be done overnight.”

I explained to her that I certainly don’t make a living by telling people not to list their properties for sale, and that telling her to re-list in a month could only then be coming from a place of sound advice, and no bias.  Any agent in the city would have jumped on that call and said, “Let’s list this together on Monday,” and I think that goes without saying.

“Your staging is awful,” I told her.

“Yeah I know,” she said.  “We did it ourselves.”

I laughed.  She did too, thankfully.

“You can’t list a unit in this market without having it professionally staged,” I told her.  Then I went through every single photo on MLS and told her what the problems were, the largest of which was that there was no dining room table.

“You’re missing the buyer pool here,” I told her.  “This has ‘young couple’ written all over it, and while ‘he’ is okay to eat on the couch every night, ‘she’ isn’t.  She wants to have real dinners, and eventually have friends over.  That’s important in this pandemic-world we live in.  The ability to sit at a table and have a nice meal cannot be understated.”

In a 550 or 600 square foot condo, you simply must show dining in the photos.  If you don’t have a dining table, then get one!  Again, I stage every single listing I bring to market, no matter what.  When a seller tells me, “We don’t need staging,” I respond, “See you on Wednesday at 10:00am with Lucie.”

The stakes are too high in this market to accept anything less than perfection.  You want to get your listing noticed?  Then make it look like something out of a magazine, which is what many, if not most buyers expect in this market.

I explained to my blog-reading cold-caller that the lack of a dining table was a massive mistake, the bright blue couch in the living didn’t work with the paint colours, the fake-trees were unsightly, the kitchen towels hanging from the stove were dirty, the trinkets on the kitchen counter looked like something from a flea-market, the TV console was way too large, the artwork was mismatched and old, etc, etc.

Not staging this condo was a big mistake, and with older condos, you’re already up against the eight-ball, since they’re just not moving right now.

If you want to get your listing noticed, staging is a must!

But so too, is pricing, however, and that’s where this one went wrong from the start.

“I’ll give your agent this,” I told her, “The MLS write-up; the ‘blurb,’ it’s pretty good!  Well-written, and it hits all the marks.”

“Thanks,” she said.  “I wrote that myself.”

There were no floor plans on MLS, and no copy of the condominium corporation’s status certificate, which I always include to highlight the building’s good standing.

Out-of-area agent, property not staged, over-priced to start, price adjustment too late, not reading the market, not marketed properly, essential marketing pieces missing from the listing, and on, and on.

This is merely the most recent example (and I happen to be writing this on Friday night so it’s fresh in my mind), but it underscores just how hard it is to get a listing noticed in this market.  But then came the kicker…

“My agent told me that I should up the cooperating brokerage commission from 2.5% to 3.0%.  What do you think?”

I knew that was coming.  That, and maybe re-listing $150,000 lower with an ‘offer date,’ to complete the full rearrange of the deck chairs on the Titanic.

As I wrote in a blog post two weeks ago, offering a higher commission merely sends out a flare that you’re desperate.  The theory is: some agent out there is so desperate to make $16,000 instead of $13,750 that he or she is going to do everything in his or her power to sell this condo to a buyer.  But in reality, there might be an agent out there who is that desperate, but he or she doesn’t really have clients.  And if he or she does, the clients don’t listen.  They hired a bum agent like that to simply open the door; not for advice.

When agents suggest that increasing the commission will bring more buyers through the door, it’s because they’ve run out of ideas, or because they never really had any in the first place.  Or both.

I know I’ve been talking about condos a lot over the past three posts, but in regards to getting your property noticed, it’s not just in the condo market.

Even in the lauded “entry-level, semi-detached” market, a ton of listings came out last week!

I had a client email me on Friday with, ready for it?  Eleven properties he wanted to see on the weekend, all on the east side, all in the $899,000 to $1,099,000 list price range.  Now we narrowed down the list a little bit, but what if another agent or another buyer wanted to see ALL of them.

Which of these properties would shine through?

The ones with all the boxes checked.

Even the little things bother me in this market, like a dirty or falling over “FOR SALE” sign on the lawn.  You know those signs cost like $30 to print, right?  And the name-rider on the bottom?  They’re like $10.  It pains me to see a brokerage with a new “FOR SALE” sign but the agent has slapped on the old name-rider at the bottom, in a different font, colour, and size.  Small thing.  Silly thing.  But it’s a microcosm of so much more.  The “FOR SALE” sign is the very first thing that people see.  What does the duct-tape on the sign tell you?

So of these eleven properties, guess how many had pre-home inspections?  Guess how many were staged?  Guess how many had done professional floor plans?  Guess how many left masks, gloves, and hand sanitizer at the front door?  Guess how many were professionally cleaned the day before the listing?

There are so many ways that a listing can go wrong, and as a prospective home-owner, you may never think about these things in advance.

For those of you interviewing agents this fall, how many of you asked, “When I call your brokerage, does an actual person answer the phone?”

How many of you asked, “What front-desk software does your office use?”

Again, I don’t want to turn this into an advertisement for BrokerBay, but come on – any brokerage not using this software is doing themselves, their agents, and their customers a disservice.

Imagine you’re booking appointments on eleven properties.  Maybe seven of those have “online bookings” and the other four brokerages are ancient, and you have to call the appointment in.  I know, I know, first-world real estate agent problems, right?  But of those four, how many go to a call centre in Sudbury?  How many go to the listing agent/broker-of-record’s own cell phone, and require you to leave a message?

Then what about the COVID waivers?  Most brokerages require buyer agents to sign these (even though they are basically like a life jacket on an airplane, but I digress…), but whereas BrokerBay lets you sign online, other brokerages require you to download, print, sign, scan, and email back a waiver, then you sit around and wait for an administrator to match your waiver with the appointment, and complete the booking.

So, yeah.  When a buyer agent is booking eleven showings, and one, two, or three are proving difficult, he or she might just say, “Screw this, eight properties is enough,” and move on.

Prospective home-sellers, tell me that you asked your agent about the front desk software, who works at reception, and how appointments are booked, right?

Folks, I’m barely scratching the surface here.

But suffice it to say, in this upcoming fall market, you can’t just list the property for sale on MLS and wait.  That’s not a strategy for success, and if you do so, you’re in for a painful few months.

Listing agents and sellers need to differentiate their properties and make them stand out.  Make sure all the boxes are checked.  Leave no stone unturned, and don’t rush to market, cut corners and/or costs, or ever use the words “Good enough.”

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So there’s my nickel’s worth of advice and insight on the upcoming fall market, even as the market is already a week underway.

I think many of us have had enough stats and predictions to last a while, so hopefully this week I’ll be able to jump into a few”tales from the trenches” styled blogs.

September 14th.  Wow, this came out of nowhere.

In my mind, I’m already writing those year-end, remember-when-COVID theme blogs for December.

But as crazy as that sounds, December is literally just around the corner, as far as the real estate market goes.

The fall real estate market goes by very fast.  Like, “I can’t believe my daughter is starting Junior Kindergarten” fast.

Right?

Top Five Burning Questions For The Fall Market Part 1

Top Five Burning Questions For The Fall Market Part 2