Toronto real estate bidding wars turn to buyers’ remorse

“Sanity is returning to the marketplace.” We have seen a nice change come in for the month of May. Buyers have more options to choose from and prices aren’t going crazy as they were a few months back. While prices haven’t dropped drastically, they also aren’t selling at insane amounts over asking anymore. We are not sure how long this will last, as we still feel the behaviour of the market is mostly psychological and once supply and demand run its course again, certainty will most likely set back in. At the moment some buyers are walking away from their deposits instead of closing on property. Skepticism seems to be getting the best of some and most are still sitting back waiting for confidence. Moving forward prices will hopefully steadily rise instead of seeing the frenzy push prices too high. We say get out there now, it’s a great time to start looking. There is no time like the present!

Read the article below for more insight….

NEWS May 24, 2017 06:06 by Kim Chipman Waterloo Region Record

Early data from the Toronto Real Estate Board indicates home listings rose 47 per cent in the first two weeks of May compared to a year earlier, while unit sales dropped 16 per cent. – Cole Burston,Bloomberg

Toronto’s hot housing market has entered a new phase: jittery.

After a double whammy of government intervention and the near-collapse of Home Capital Group, sellers are rushing to list their homes to avoid missing out on the recent price gains. The new dynamic has buyers rethinking purchases and sellers asking why they aren’t attracting the bidding wars their neighbours saw just a few weeks ago in Canada’s largest city.

“We are seeing people who paid those crazy prices over the last few months walking away from their deposits,” said Carissa Turnbull, a Royal LePage broker in the Toronto suburb of Oakville, who didn’t get a single visitor to an open house on the weekend. “They don’t want to close anymore.”

Home Capital may be achieving what so many policy measures failed to do: cool down a housing market that soared as much as 33 per cent in March from a year earlier. The run on deposits at the Toronto-based mortgage lender has sparked concerns about contagion, and comes on top of a new Ontario tax on foreign buyers and federal government moves last year that make it harder to get a mortgage.

“Definitely a perception change occurred from Home Capital,” said Shubha Dasgupta, owner of Toronto-based mortgage brokerage Capital Lending Centre. “It’s had a certain impact, but how to quantify that impact is yet to be determined.”

Early data from the Toronto Real Estate Board confirms the shift in sentiment. Listings soared 47 per cent in the first two weeks of the month from the same period a year earlier, while unit sales dropped 16 per cent. Full-month data will be released in early June.

A couple months ago amid robust demand, it was common for sellers to price their homes on the low side to spur bidding wars. Such tactics won’t work now, according to Century 21 Millennium Inc. brokerage owner Joanne Evans.

“The frenzy is over — it’s over,” said Evans, who focuses on Toronto suburbs such as Brampton. “Sanity is returning to the marketplace.”

Recent competition for homes had some prospective buyers so desperate they were buying properties “sight unseen,” said Shawn Zigelstein, a Toronto-area agent with Royal LePage Your Community Realty. Others made offers without an inspection.

In February, home-inspection firm Carson Dunlop saw a 34 per cent drop in volume. Business has improved since then, with the first two weeks of this month putting the Toronto-based company on track to be unchanged from May 2016, according to founder Alan Carson.

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