Think for just a moment about how quickly our Toronto real estate market moves. It’s insane.
Compare our market to other markets around the world, the continent, or even the country, and it’s like real estate on steroids. Houses are listed and sold quicker, and more competitively, than in just about any other market.
Buyers constantly fall behind the pace, and often get scooped by competing buyers. Thankfully, not everything in life moves that quickly, but imagine if it did?
No matter how hard I try to convey our current market climate to new, uninformed, often naive buyers, there’s always one or two that don’t want to acknowledge it.
The opening scene of this video is one I’ve experienced a couple times so far this year.
Ultimately, it’s up to the buyer to act, or not. If they don’t want to see a house, or buy a house, that’s their prerogative.
But if after explaining the market conditions to a buyer, they still don’t feel any sense of urgency to see a new listing for a single-family home that’s in their price point, then getting scooped, or losing a house, is inevitable.
And it happens to Toronto buyers every single day in this market.
I tried to draw some appropriate parallels in the video.
Imagine you’re at the gym, you get a quick sip of water, and after being distracted only for a moment – you return to find that some meat-head is now chugging the entire barrel of water?
That is what happens in our real estate market, that is red-hot, hyper-competitive, and where buyers are constantly looking for an edge.
But in 2015, going to see a new listing for a single-family home within 24 hours of the property hitting the market isn’t gaining an edge, or using a tactic, or thinking outside the box.
It’s simply the new norm.Back To Top Back To Comments
at 9:50 am
at 9:52 am
People will keep ignoring the realities of the market. That’s because some people see the world as they wish it was, not as it is.
It’s like women who keep dating jerks because they hope to change them, or guys who want to fix their own plumbing and electrical problems. It never ends well for them.
at 10:44 am
Very good comparisons. Sometimes it takes a little humour to get the point across 🙂
at 10:45 am
The video misses one important reality of the market – across the street from the used Lexus dealer there might as well have been a guy looking to rent the same used Lexus at half the monthly price – and pay your maintenance, insurance on the car (not the contents), and eat any depreciation on the value that might occur. He’d pay to handle any normal wear-and-tear on the vehicle – and when winter came he’d even pay to put winter tires on. Look hard enough, and negotiate wisely, you might even find that dealer will for a small extra fee pay your gas too…. The Used Lexus Sales Association says don’t even bother crossing that street – there’s really only 1.7% availability rate for used Lexus vehicles in the GTA – so you may as well not even look. But that guy’s right there across the street – sorting smarties because he doesn’t have any customers and there’s nothing else to do…..
Sure you’d never own the Lexus, but why put up with the hassle of a hot market when you don’t have to? I guess to me the video is as accurate a depiction of the Toronto real estate market as it is to you – but I’m curious why that means to you that the only rational response is to capitulate?
at 10:56 am
@Marina – Because David is talking about those who have already gone through the rent vs buy exercise and have decided that they want to buy, however unsuitable that might be for them (not that it is for everyone).
@David – Another hilarious video and you definitely missed your calling (well, maybe not as you seem to be doing pretty well in real estate). People who think that the market is serving them in this hot market are delusionary, just like the people near me who are trying to sell a house for $3.5M, when it should be listed for $2.5M, yet they are surprised they haven’t gotten an offer in 90 days. You snooze you lose in this market, no matter how insane capitulating my seem to you.
at 6:48 pm
Well, you thing the video misses the point and I don’t. The topic you raise is mutually exclusive given the video is about people who want to buy.
at 11:00 am
Your point does not negate mine. If you choose to rent, you are out of the market anyway. And that is a perfectly good choice.
But if you want to own, the reality is that you need to work with the market as it it.
Just like if you want to stay single, that is a perfectly valid choice. But if you want to get married, dating people who are already married is stupid.
I’m not going to argue whether it is better to rent or to own. That’s a whole other conversation. But there are and will be people who want to own a house but refuse to do what is necessary to do so.
at 2:06 pm
Great video, David!
Lots of delusional people out there who refuse to accept market conditions. Also many other delusional people who will claim this is indicative of “over-valuation” or a bubble, which is dead wrong. What it actually is indicative of is “under-supply”. And over the last few years that under-supply situation has gotten worse and is spreading to new areas and new housing forms. Years ago bidding wars used to only happen on prime downtown houses, giving buyers only 7-10 days to react. Now they happen on condos, townhouses, in the 905’s, hell even in Hamilton. Bully offers are spreading in a similar fashion, now buyers have to be ready to pull the trigger in the first day or two of a listing hitting the market. I expect bully offers to begin spreading to condos and outer areas in short order if they haven’t already.
at 10:23 pm
Its mostly indicative of cheap credit. Under-supply in this case is a function of historically low interest rates, when people can borrow 1 mil at 2.5%, they immediately start looking at properties that were not affordable to them in the not-so-distant past. Once interest rates will start going up again (its just a question of “when”, now “if”), there will be no “under-supply” issue anymore because all the poor bastards that drive leased bmw’s and took 1mil mortgages on their houses will no longer be able to afford making payments on their overpriced houses.
at 10:12 am
I’ve heard the exact same thing said for the last five years: It’s cheap credit, rates will rise (not if but when), yada, yada.
First, when you say cheap credit, “cheap” relative to what? Canada’s key interest rate is 0.50%, same as UK’s, US’s rate is half of ours at 0.25%, ECB’s is NEGATIVE 0.30%. Or do you mean cheap relative to history? Like when the Global economy and Canada’s economy were running at full capacity and inflation was two to three times higher than today (i.e. A time when the economic environment looked absolutely nothing like it does today).
Second, at what point do you start to feel silly for being wrong? For the last five years, i keep hearing your camp say, “It’s just a question of ‘when’, not ‘if’ rates will rise”. Jan 21, 2015 rates were CUT, then back to the same old chorus, “It’s just a question of ‘when’, not ‘if’ rates will rise”. May 27, 2015 rates were CUT, same old chorus, “It’s just a question of ‘when’, not ‘if’ rates will rise”. Clearly the last two times the “if” was definitely in doubt. This week, Poloz has been openly talking about not ruling out the use of negative interest rates, raising the inflation target and policy divergence with the US. Are you so sure you can rule out the “if” again? By the time you guys are finally right and rates rise in a meaningful manner, the BMW guy may have already paid off his mortgage and traded his BMW for a Porsche.
I’m not saying that rates will never rise, but have you considered that perhaps your camp is going about things all wrong (hint: you are going about things all wrong)? Maybe the question you should be asking isn’t “if?”, and it isn’t “when?” either. The question you should be asking is “WHY?”. As in why would the Bank raise rates when our economy is way below full capacity? As in why would the Bank raise rates when our inflation is below target? As in why would the Bank want to put the last nail in the coffin of manufacturing and resources which is only being preserved by our low Canadian dollar? As in why would the Bank want to extinguish housing and construction the one part of the economy that is actually contributing to positive GDP? When your camp can answer WHY to any of those, then you might gain back a modicum of credibility.
at 2:35 am
Hi there, thanks very much for these very useufl examples.I’m converting to png and displaying a postscript file (ps). The file has more than one page (not unlikely a pdf). If I load the images without  it will always show the last page; instead if I put in any index number, it will always show the first page only. For example:$im->readImage( test.ps ); //shows the first page instead of the thirdAny ideas of why this is happening?Cheers,R
at 3:51 pm
I really loved your “deer-in-the-headlights” look when the new baby arrived!
at 4:19 pm
Is that your Lexus in the video? If I gave you $30,000 for it, would it come with an autograph? Maybe a signed head shot? A role in all of your future videos?
at 5:17 pm
I am curious how this level of hot GTA sales has affected rentals? In Willowdale, anecdotally, I see a lot of “For Lease” signs on lawns that hang around way longer than I would expect. If big numbers of people are competing fiercely to buy the limited amount of homes that come up for sale, does that mean that smaller numbers of people are willing to rent? Is there an MLS expert here that can parse the data to see what it shows?
at 7:21 pm
I like this video, but I find this is one of those things that is better learned than told. When we were looking to enter the market a couple of years ago we thought we would get a deal, or not have to go into a bidding war.
It takes some time for those who aren’t involved in this market everyday to come to terms with it. Once able to accept the market I realized that there are no ways around the insanity if you want a quality product. But a little bit of skepticism is a good thing in this market and I don’t think buyers should submit a bully offer their first day of looking.
at 8:19 pm
Honestly, after being on both sides of the spectrum as a buyer and a seller working with different agents; I can assure you that the whole “rushed” conundrum is a tactic of realtors (not all, but a good majority) causing such movement from greed.