Brokers see fewer bids on homes as Canadian sales plummet – National
Prospective buyers who are tired of battling dozens of competitors to buy a home are beginning to find relief from the frenzy of the past two years.
Brokers in Toronto and Montreal say many properties are seeing fewer offers than just months ago, when buyer anxiety was still fueling frantic bidding wars, but the slowdown in bidding is not has not yet resulted in sharp price declines.
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“With a lot of smaller condos under 1,000 square feet, or semi-detached properties up to $1.5 million or even just under $2 million, I find for sure there are fewer people who only bid in February,” Sara said. Rowshanbin, a Chestnut Park Real Estate Limited broker in Toronto.
“So where I could have bid against more than 15 people, now I could be bidding against four or five people.”
Earlier this week, the Toronto Regional Real Estate Board reported that the number of April sales in the market fell about 41% from the same month last year and 27% from March.
The average home price was above $1.2 million, down from about $1.3 million the previous month, but was still about 15% higher than a year earlier , when the average price was above $1 million.
The potential buyers fueling the drop in bids are potential buyers Rowshanbin noticed feeling too nervous to enter the market in case conditions change quickly, preferring instead to wait on the sidelines until they have a better idea of the real easing of the market and how much the rate changes will affect their purchasing power.
“They kind of want to reevaluate how they’re going to approach this new market with higher interest rates, but I don’t think they’re going to sit on the sidelines for too long,” she said.
Marc LeFrançois, broker at Royal LePage Tendance in Montreal, has similar observations.
He has recently seen homes sell after receiving one or more offers, rather than the 20 brokers he used to deal with months ago.
Last month, home sales in Montreal fell 17% from a year earlier, making it the least active April the market has seen since 2017, the Professional Association of Traders said. Quebec real estate brokers.
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Despite signs of a market slowdown, buyers didn’t get much relief. Median single-family home prices rose 16% to $580,000 in April 2021, even up from March 2020, when prices hit $566,000. The median price of a condo has increased by 15% year over year to reach $410,000.
But the reduced number of offers received by some properties has some LeFrancois clients wondering why they should bid significantly above the asking price if sales are down.
“Buyers are a little worried. They are worried when they buy a house and it hasn’t been done in multiple offers,” he said.
“I have a client this morning, I was talking to him and he was like, ‘Did I pay too much? Nobody else was bidding and it’s strange because the last two years, there were 20 buyers for one house.
Despina Zanganas, a Toronto real estate agent with PSR Brokerage, has also seen a drop in visits to some secured properties. While it was normal to fight for a reservation, many properties are now only visited once or twice a day.
Some of her clients are hoping it’s a sign they can get a deal done, but she said, “I don’t know if there’s still a lot of deals to be had, especially downtown.”
But that doesn’t mean people won’t try to negotiate anyway.
LeFrancois detected a shift in mentality, when a home is listed and it’s still on the market three weeks later. Now buyers are increasingly trying to negotiate rationally for these properties, instead of moving forward at the breakneck pace they once would have, he said.
Despite the shift in buyer mentality and moderating sales, LeFrancois said many sellers still have high expectations.
“They see (the market) as a linear line going up,” he said. “They say, ‘I’ve waited a little longer for the market to keep going up,’ and it’s going to be a little tough.”
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