I can already hear the complaints about this blog post on the real estate Facebook groups.
For the record, I’m not a part of any of these groups. Thousands of agents are, and there are some big groups!
But I find them to be inherently negative, often in denial, and they often want to ignore market truths.
Every so often, a colleague will say, “You should see what so-and-so said about you on this-that Facebook group!”
Like I give a shit. Some old bird who does two deals a year is complaining because I talk openly about the fact that most realtors don’t transact? No kidding, she wants real estate transactional data kept quiet! Or another agent takes me to task for divulging the terms and conditions of an offer night, in full, in a blog post? Yeah, he’s afraid of how he would explain anything to anybody if the industry changed at all.
So with that said, today’s blog post is going to highlight a “changing market,” and I know that the agents who work these areas are going to be pissed.
But so long as I’m being truthful, is there really any merit to a complaint?
A reader suggested in Monday’s comments section that I talk more about how many properties in Courtice are being listed over-and-over, often with different pricing strategies.
On that, I’m happy to oblige!
But I’m not going to stick to Courtice. I’m going to look at all of Durham Region.
Now, a couple of qualifiers first and foremost:
1) Properties are still selling, often well! There are lots of sales for 140% of the list price, many properties getting bully offers, and many receiving multiple offers. I’m not looking to paint the whole region with a negative brush, nor am I going to deny strength in the market for some property types, areas, or price points.
2) I’m not picking on Durham. I chose this region because I’m looking for one region on which to focus, and because I was asked by a reader. Halton and York are also showing these “changing market” signals.
3) I cannot divulge sales data. Because of TRREB’s rules that prohibit realtors from providing sales data, all the houses will have the addresses blacked out. Regular readers are familiar with this, but for the people reading because they found this on a Sub-Reddit somewhere, this is why I black out the addresses. And for the realtors working these areas, who still don’t like this post, who will claim, “So what if the address is blacked out, people can still do some digging and find out the addresses,” let me remind you that doing some digging is where the idea of “divulging sales data” becomes something different.
So without further adieu, let me introduce you to a changing market.
Failed Offer Night Leads To Plan B
Here’s an example of where the seller go what he or she wanted in the end, so you can call this a success.
But it shows a changing market nonetheless:
This property was listed on April 29th for $699,900 with an offer date.
The offer date failed.
They re-listed for $969,000 and sold for $900,000.
I’d call that a success.
I left the original purchase price from 2015 there just so you can see that, despite a “drop in prices” in Durham Region, appreciation has still been insane.
Same Thing, In Reverse
Here’s an example of the complete opposite of the above, but which was still a success.
The seller elected to list higher, at fair market value, rather than under-list with an offer date.
Who knows why the seller switched gears after only four days, but they re-listed $150,000 lower, with an offer date, received multiple offers, and sold for $765,000.
No, it’s not every penny of the original $799,900 asking price, but it’s still a sale in a changing market.
I Absolutely Hate That This Worked!
This is awful.
I can’t believe this actually worked:
They listed at $1,097,800, clearly looking for $1.2M+, and did this not once, but twice!
Then they took the veil off and re-listed for $1,237,800.
Likely getting zero showings, they abandoned this strategy after three days.
They re-listed lower, and even lower than their first listing, this time at $997,800.
They sold for 121% of the list price.
I hate that this worked!
If At First You Don’t Succeed, Try, Try Again!
Here’s another success story, although it shows you how somebody played the long game:
These sellers listed for $949,900 in March and were on the market for 26 days without selling.
Now here’s the rub: in Durham, it’s very common for sellers to list at a price that they will not accept, with no offer date, and leave the listing up. “False advertising,” in my opinion, but a topic for another day.
So did the sellers expect more than $949,900? I’m not sure. But I would be very surprised to hear that they didn’t, given they re-listed for $699,900 and sold for a whopping $999,000.
This is an odd one, folks!
If At First You Don’t Succeed, Try, Try Again V 2.0
Here’s another example, and in this one, you can clearly see that the sellers were listed at a price they never intended to sell for:
In fact, listed at $800,000, the MLS remarks read: “offers any time.”
They did not have an offer date, and yet, they had no intention of accepting $800,000.
They re-listed at $600,000, and to my utter dismay, they tricked the market and sold for $923,000.
You Were Right The First Time!
These guys sold for what they were first listed at, but not before trying Plan-A and Plan-B before Plan-C:
Listed at $1,099,888 in early April, they did not sell on offer night, and promptly listed $150,000 higher.
Two weeks on the market and they terminated and re-listed $75,000 lower.
Then they sold for $75,000 less.
Do the math, follow the bread crumbs, and they sold for their original list price which was their “artificially low to solicit multiple offers,” price.
Wrong Once, Wrong Twice…
Here’s a case like the above, except where they failed on Plan-A, Plan-B, and Plan-C:
They listed at $799,000 and were on the market for 27 days before raising the price, after a failed offer night, to $848,800.
That didn’t work.
Likely needing to sell the house asap, they re-listed for $729,900 and sold for $710,000.
Wow, Did That Ever Backfire!
Surely, we’re going to see cases of people selling for less money than they had already been offered.
I suspect this might be a good example:
These guys listed in March for $999,900 with an offer date.
That didn’t work. So they re-listed for $1,150,000 with offers any time.
That didn’t work. So they re-listed for $1,100,000 with offers any time.
That didn’t work, although they only tried it for one day, so they re-listed for $899,900 with an offer date!
That didn’t work, so they raised the price again, this time to $1,000,000 even.
That didn’t work, so they tried $899,000 again, and this time, sold for $940,000.
That’s $60,000 less than their first “underlisted” price.
A 25% Haircut
These might be all starting to look the same to you, but trust me, they’re not!
Check this one out:
Similar pattern as the last few.
They tried “under-listing” at $1,099,000, which, ironically, they didn’t even get two months later!
They hit a peak list price of $1,299,000 in March and ended up selling for $980,000 in May. That’s 25% less than their highest list price.
A 26% Haircut
This is the property I showed you on Monday, having sold in the interim:
Their $1,279,000 list price was based on a previous sale, except, of course, it was HIGHER than that sale!
Greed, eh? It makes people do crazy things.
Listing at $699,900 after having been listed at $1,279,000 three weeks earlier just reeked of desperation.
Having sold for $950,000, you have to wonder: what was the most money they turned down in the previous month?
Worst Case Scenario: Breach
This is the worst case scenario for any seller:
Do you see what happened here?
These sellers listed for $799,900 in February, sold for a whopping $1,035,000, and were ready to move on with the rest of their lives.
The deal was scheduled to close on April 25th.
On April 29th, the property was re-listed by the same owners.
May we assume that there was a breach on closing day? I am not privy to the details, but that is the only explanation.
On May 9th, the property sold for $850,000. That’s 18% less than the property sold for in February.
The seller can now sue the original buyer for the $165,000 difference, plus the right to keep the deposit, plus costs of the action. If the sellers sees this through, likely 2-3 years, and likely $40,000 in costs, then the seller will win. No doubt about it, the seller will win. But does the seller want to go through this? Time will tell.
Worse(er) Case Scenario!
Same situation here as with the above:
This property sold in January for $1,650,000.
It was scheduled to close in March.
It did not close.
The original sellers, still the owners, re-sold for $1,330,000.
They will now have to start litigation to recapture their loss.
As I said at the onset, the goal here isn’t to pull selected “tough sales” from an area to prove a point about that entire area.
There are still houses in Durham Region selling for 132% of the list price. One house I know of received eighteen offers last week.
But there are also listings like the ones we saw above which we were not accustomed to seeing in the first quarter of 2022.
The market is changing.
And this is what a changing market looks like.
One day, a house sells for an absurd price. The next day, a house is reduced in price by a large amount. The day after that, a property is re-listed for 40% less, and now there’s an offer date.
As a buyer, it’s tough make sense of it all. This market will keep you on your toes.
As a seller, you simply have to acknowledge that the market has changed, and change with it. Failure to do so will be met with spectacular failure as we saw in many cases above…