“How’s the market doing?” It’s the classic question that I get asked daily from clients, friends, family, and even strangers. No one wants to know how I’m doing or how the family is, it’s all about THE MARKET!
The current assumption right now is that the market is bad. Really bad. It seems the various headlines in the newspapers and websites talking about the plummeting sales and falling prices have changed the mindset of the population. Just as the mainstream media hyped up the rise of the Toronto Condo market over the past several years, they are now doing their best to broadcast it’s apparent downfall.
There is a perception that sellers are in desperate times, that firesales are happening left and right, and that buyers are getting massive discounts from asking prices. Truth be told, it’s really not that bad.
I’ve been in 4 separate offer situations (on both the buying side and the selling side) in past 10 days where an offer was put in writing but the deal did not happen for the same reason: buyers want a deal and sellers do not want to give them one.
I am not seeing any panic selling. Sellers are for the vast majority, not in any desperate situation where they will sell at any price.
Some may say that sellers are just avoiding reality, that they are still stuck in the past and think they can command any price for their properties. Personally I think that it is just a slow market. There are many properties that will sell after 60 or 90 days on the market and the selling price will be 97-99% of the asking price.
Edit: There are always exceptions to the rule. Since first drafting this post, one of my ‘4′ offers that did not work out, actually did work out. The sellers gave in to my buyers somewhat ridiculous demands and so my buyer-clients are walking away with what I think is a really amazing deal.
Questions? Comments? Contact me or leave me a comment below.
February 20th, 2009 at 12:33 pm
so how is the family?
February 20th, 2009 at 4:18 pm
They are good, thanks for asking!
February 22nd, 2009 at 12:52 am
And guess what? That client who you think made ridiculous demands just helped set the market for the next buyer (gotta love the old invisible hand). This is how bubbles burst, one buyer at a time
February 23rd, 2009 at 3:39 pm
What most sellers don’t realize is that most of us buyers who have/(had) money have lost about 20-30% on average in our investment portfolios.
That leaves us with 20-30% less to put down on real-estate. Which is going to leave the seller with 20-30% less than I’d normally put down as an offer.
February 23rd, 2009 at 3:49 pm
Valid point Dave. I had another client who subscribes to my blog’s feed express a similar sentiment to me via an email.
Nothing wrong with putting in low-ball offers in this market, but expectations on what will actually be accepted needs to be tempered with a real understanding of current market values.