Isn’t the 2013 real estate market supposed to be slow?  Isn’t it supposed to crash?

You won’t believe the week I just saw.  I swear, I could list a storage locker for sale on MLS and get multiple offers…

I found a great image for “WTF,” but I thought some of your work computers might flag it, plus, it’s just so cliché these days.

Remember when “FML” was funny?  I watched Superbad the other night, and remembered the how hard I laughed when I heard “FML” for the very first time…

Last week was a rather….interesting week in real estate.

It was interesting because it went way, way beyond what any of us could have ever expected.

Maybe it’s just me, or maybe it’s not, but my experience with a handful of properties and handful of clients led me to believe that if the first two weeks of January are any indication, it’s going to be a big Spring for sellers in the Toronto real estate market.

I predicted that 2013 would have stagnant growth, and I stand by that.

The newspapers and economists have predicted doom and gloom, although, they’ve retracted that in the past few weeks and are now come around to the idea of a “flat line.”

But from Monday to Friday last week, all I saw was craziness.

I’ll be honest: I don’t want to see 2013 filled with bidding wars and insane sale prices.  Been there, done that.  But we’re at the mercy of the market and its participants, and last week showed me that buyers aren’t listening to the negative talk, and that sellers are relishing the primo market conditions.

Here was the week that was…

Monday

During our weekly meeting, we read out the sales and the new listings, and we are shocked to hear about a condo that sold last week.

The property was at Yonge/Davisville; nothing special.  Great unit and all, but it’s still “just” a condo.

“Shock and awe” can’t begin to describe the reactions when it was divulged that this condo sold for 108% of the asking price with seven offers!

Seven offers.  Yes, seven.

On a condo!

I mean, good for the seller, and good for my colleague, but SEVEN OFFERS?  On a condo?

Folks – if you’re a current client of mine, or you’re reading this with an eye on the market, let me make one thing abundantly clear: there is no way in hell I would ever tell a client to ‘bid’ on a condo against six other buyers in 2013.

Never.

There is no circumstance, no property, and no way that in this market climate, I would ever tell a buyer to get involved in that.  If the property was listed at $1.00, I still wouldn’t.  In fact, that would be more reason not to get involved.  Maybe this condo was “under-priced,” but by how much?  Why would anybody ever buy a condo in this market, under those conditions?

At the risk of stepping on the toes of my industry colleagues, I’ll say this too: I think the seven buyer-agents in that situation did their clients a serious disservice.  They’re not guiding and advising their buyers about the market in 2013 – specifically the condo market.  I think they sold their clients out.  There’s just no reason to have your clients get wrapped up in a bidding war over a run-of-the-mill condo.

Tuesday

A couple of my colleagues are telling stories by the proverbial water-cooler (in this case it’s the photocopier; we don’t have a water cooler at Bosley…).

One of them is sounding off about the “nuts” who are out there in the buyer pool today.

Again, I have to be completely anonymous here, but “a house on the east side” came onto the market with little fanfare in the mid-$500’s range, and yet it didn’t sell anywhere close to that price.  Was it a great deal?  Do I mean, it didn’t sell anywhere close to that price because somebody nailed it for 90% of asking?  No, I don’t…

The house sold for $50K over asking, or roughly 9% over list.

But the “nuts” involved in this situation were nutty because there were only two offers!

So assume this semi-hypothetical house was listed at $569,900, and assume it sold for $620,000.  There were only two bidders/buyers/offerees on this house!  Even though the first buyer might have offered $569,900, or even less, the second buyer – aka the “nut” thought it prudent to offer $620,000.

“I don’t want to lose, so I’m going to win BIG, thus being the loser…”

That’s how I think this played out.  Who knows – maybe offer #1 was $585,000, and the $620,000 bid wasn’t all that bad.  Actually, wait, no, I’m wrong…..that is bad.

Who are these people?

Wednesday

A century-old Victorian in the west end was listed on Monday for $699,900, and I sent it to a few clients who happened to be looking in that price range.

It was a nice house, full of potential, but not A+, and not a slam-dunk.

A house like this probably needs some work, and most certainly needs some updating.

I had plans to go and see the property on Friday with one set of clients, and Saturday with another.

Would you believe that it sold in two days?

It’s conditional, so I don’t know the sale price, but I didn’t think the asking price was spectacular.  It wasn’t under-listed by any means, and yet it still sold in less than 48-hours on the market.

Thursday

There’s a house in Moore Park, listed at $2,199,000, that is of interest to one of my clients.

So far in 2013, there hasn’t been a lot for sale in Rosedale or Moore Park; just the same re-treads from 2012, and a handful of $5M++ houses that always take forever to sell regardless of the market conditions.

This house looks pretty good!  If it were in Rosedale and not Moore Park, it would probably be closer to $3 Million, so my clients have decided that perhaps spending $2 Million on a house and $1 Million on a cottage makes more sense than spending $3 Million on a house, and saying “We live in Rosedale.”  Their kids are going to Branksome Hall regardless of whether they live north or south of the train tracks on Summerhill, so now they’re value shopping in the $2 Million price range.

We didn’t get a chance to see the Moore Park house on Wednesday when it hit the market, but that’s no matter; we’re not in a hurry, and it’s not like $2.2 Million houses sell overnight.

Or do they?

I get a call on Thursday morning saying that the house has sold firm.

“I told you so,” says my client.  “My wife says that I’m never right, and she’s probably right about that.  But I was right this time!  Remember this!”  Thank God my client has a wicked sense of humor and he’s not upset that we didn’t get a chance to go see the house!  He did tell me, “That seems like a great price for that house,” a day earlier, and here I was telling him that I didn’t think the property would move.

Not only did the property move overnight, but it seems there was a lot of interest.

Listed at $2,199,000, it sold for a modest $176,000 premium over the asking price; $2,375,000.

So much for the buyer’s market…

Friday

There’s a house in the west end that my clients like.

They’re first time buyers, looking in the exceptionally difficult $500-$600K price point, and this awesome 3-bed, 3-bath house is listed at $549,900.

We love the house, and even though my clients have only recently started their search, they’re primed to go on offer night – January 22nd @ 7pm.

Fate, karma, or goddam bad luck; whatever you want to call it, we suffer the consequences.

Damn those “bully offers” and the agents that accept them!

On Saturday morning, I find out that late Friday night – a bully offer was forced upon the sellers, and they reviewed it, and subsequently accepted it.

My clients are crushed, as am I.  I’m not naive, and I don’t think that there are a set of “rules” that need to be played by in organized real estate in Toronto, but it was pretty crummy to find out that this property, which was set to review offers on Tuesday the 22nd, actuallysoldon Friday night.

The worst, or best, part of this story, is that the house ‘only’ sold for $580,000.  A joke.  A mother$*$*$ joke.  This house was worth $625-$630K, and for whatever reason, the listing agent, the seller, or both, decided that they should take a modest $580K on a Friday night at midnight because it was forced on them.  Several of my clients, myself, and my clients were upset and dismayed to hear of this, and we all had the same awkward chuckle as we said, “Whaaaaaaaat?”  Call that a “silver lining” if you’re vindictive, but the seller left upwards of $70K on the table if they’d waited until Tuesday.  Stupid, stupid, stupid.

Whaddya gonna do when there’s no transparent, identifiable, set procedure for reviewing offers?

.

So that was the second week of January, 2013.

The spring market has been alive and well for two full weeks since everybody has been back, and clearly we underestimated it severely!

Maybe last week was an outlier, who knows.  But I can’t say I snagged any $370,000 condos for $340,000, that’s for sure.

The housing market is absolutely booming right now, and those who thought they were in line for a “deal” will either accept that they won’t get one, or keep waiting and waiting….and waiting…

Hey, I don’t make the market; the market makes us.

Or rather the buyers and sellers and their interactions make the market, and right now, it seems that the Spring of 2012 has continued into the Spring of 2013, with the Fall of 2012 just being a pleasant opportunity to catch one’s breath…