I was circling a neighbourhood about a year ago, trying to find a parking spot so I could present an offer for my clients in a bidding war. It was about 6:30pm with offer presentations starting at 7pm and the streets were lined with cars filled with realtors and clients. It was pretty hard to find a parking spot, but at last, I found one where I could see the homes front door. I like to see the agents come and go as they present their offers, I like to time them. I figure if they are in and out of the home in under five minutes, the agent was all business and didn’t build a relationship with the sellers. (Tsk Tsk, you always want to build a relationship with the sellers, it gives you a huge advantage and I have won several offer presentations because of this.) When the offers are close, the sellers will pick who they WANT to buy their home.
I had my clients near by waiting for me to tell them the results of our offer and were available in case we have to make any last minute changes. There were 17 offers… yes 17 offers! A few of the offers were faxed or e-mailed in but about half were being presented by the buyers’ agents. This had become a new normal for the Mississauga real estate market and you had to have a mixture of creativity, determination and motivation to win.
After three long hours, my clients had purchased the home! We bought the home for a reasonable price and my clients were thrilled. Agents like to add fuel to these hot markets by under-pricing homes to increase the amount of offers they receive. My clients and I had researched current market trends in the area and knew what the max the home should sell for. We purchased the home within our budget!
This was a year ago and over that last year, I have noticed a change. While we still have bidding wars, I am noticing less competition and the same “under price and hold off offer” strategy being used to the point that buyers are getting frustrated.
The price for real estate has been steadily increasing since 2008 and even as the prices have increased, the selling price has been predictable. That’s the joy of having experience. With experience comes knowledge and by watching the market trends I have been able to give my clients the proper advice on how to position themselves in these markets.
So, is the market still hot? You bet! Are interest rates going to stay low for awhile? I would say so (Trudeau is counting on it!) Are homes that are priced properly still going to fly off the market? No doubt! And the big question, will the “bubble” in Mississauga or the GTA pop? Not likely. The Greater Toronto Area is Canada’s financial capital, we have the jobs, we have the local and international immigration and currently we do not have enough housing to sustain the growth. As cities build up with condo’s, the buyers who are fortunate enough to buy a home with soil will continue to see increases. Basic economics of supply and demand will keep housing strong within the GTA as expected growth for the next two decades is approximately 200,000+ people a year.
So what does this all mean? It means, that in my opinion, that the market is starting to stabilize. Buyers have gotten used to low interest rates and are starting to stay true to themselves with the price they are willing to pay for a home. Interest rates will stay low, but lending guidelines are starting to become a little stricter. For awhile there, the buyer did not care about the overall price of a home, they focused on the monthly cost and this attitude is starting to change. What we are noticing is that local buyers are getting frustrated of the “under price strategy.” The result? We are now seeing homes that have an offer date, NOT SELL until a few days later. When this happens, you usually see the home relisted at a more realistic price and not holding off offers.
In closing, when you see a home that pops onto the market that may be under priced, go see it, you never know what is going to happen on offer day. When you are thinking of selling, hire an experienced Realtor. An experienced Realtor will know todays trends and will ensure their client will win in these market.
Thanks for reading,
Mike Elsey