The bad news: interest rates are at their highest in 22 years. The good news: buyers who can afford to wade into the market are snapping up great deals as listings languish and sales decline. Here, three different agents representing three different properties share why they recently reduced their asking prices. They also explain why the market dip will likely continue into the new year.
The place: A two-storey detached in one of downtown’s prettiest neighbourhoods Listing price: $2,249,000
Sold for: $2,190,000 Date sold: October 27 Bedrooms: 3+1 Bathrooms: 3 Size: 3,150 square feet Real estate agent: Richard Himelfarb
“The sellers completely rebuilt this house 10 years ago. When we listed it at $2.6 million in September, we knew we were pricing ourselves high in such a tight market. Buyer feedback confirmed our suspicions over the next month. We then reduced the price to $2.35 million and got lots of bookings.”
“One person in particular showed great interest but wouldn’t commit to an offer. I convinced my clients to make a further $100,000 reduction to persuade the buyer. Sure enough, they countered with $59,000 below our ask. We’re in a buyer’s market right now, so we accepted.”
“I’ve been in real estate for 12 years. The state of the market these past three months is like nothing I’ve seen. House hunters are calling the shots, and deals are much harder to put together. If you list a property even a little bit too high these days, it’s difficult to get showings, let alone offers.”
Danforth: Pape Avenue
The place: A century-old semi with a finished basement Listing price: $999,000
Sold for: $980,000 Date sold: October 27 Bedrooms: 3 Bathrooms: 2 Size: 1,300 square feet Real estate agent: Scott Hanton
“This listing was perfect for first-time homeowners looking to avoid high-rise living: three finished levels, a porch and a leafy backyard. But the house is on a busy street, which can be a disincentive. In the spring, a very similar listing had sold for $1.1 million, so we decided to list it at just over $1 million to drum up interest.”
“We discovered that people don’t feel pressured to buy right now. It took seven weeks to get 30 showings. Usually, if you have a listing in an appealing neighbourhood, it takes a week to hit that number. We dropped our price by $20,000, to $999,000, but still nothing.”
“After nearly two months of futility, we considered taking the house off the market and re-listing in the spring. But, fortunately, we found great buyers who purchased the home for $19,000 under asking.”
“The frenzied bidding wars of the past 10 years are gone, and it’s taken a year for sellers to adjust their expectations in terms of what they can get. Interest rates are starting to stabilize, but we haven’t hit the bottom of the market quite yet.”
The Junction: Hook Avenue
The place: A freehold townhouse with a front and backyard Listing price: $1,300,000
Sold for: $1,280,000 Date sold: November 1 Bedrooms: 4 Bathrooms: 1 Size: 1,650 square feet Real estate agent: Ted Neal
“This home has 10-foot ceilings and crown moulding. It’s in the heart of the Junction, a short walk from the UP Express, which can get you downtown in five minutes. The main drawbacks: it has only one bathroom, and it needs roughly $30,000 of electrical and roofing work.”
“Earlier this year, a comparable listing hit the market for $1.4 million and then was reduced to $1.3 million. Factoring in the cost of renos and bathroom additions, we listed at $1.3 million. On October 25, when the Bank of Canada announced that it was holding interest rates, that boosted buyer confidence, and we got two serious showings the following day.”
“One buyer made us an offer at $20,000 under asking, and we accepted. My clients could have gotten much more a few years ago, at the market’s peak. But there’s a new reality now: for sellers, confidence has been absolutely stripped away by high interest rates.”
“But this is still a great time to get in the game. In the past, I had clients regularly competing with 10-plus buyers trying to outbid each other. Buyers today—for the first time in a long time—aren’t competing for everything. They can take time to do their due diligence without feeling rushed.”
Are you an agent who recently sold for under asking? Send your story to [email protected].
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
