‘The madness is gone’: Toronto sellers need to realize they’ve missed the top of the market, says real estate agent

Toronto home sellers need to adjust their expectations, real estate agents say, as rising interest rates and changing consumer expectations have dampened the market.Evan Buhler/The Canadian Press

Real estate agent Leslie Battle has a candid message for sellers wondering if they missed the Toronto market peak.

“Yes you can. I’m sorry, but you did. There’s just no other way to say this.

Heading into a torpid July, the Royal LePage Real Estate Services agent feels like the entire industry is pulling in for a breather.

Ms. Battle does much of her business in the luxury pockets of west Toronto and Etobicoke, where low inventory has kept prices steady but the foam has dissipated.

Three weeks into May, owners were still clinging to the desired price. By the third week of June, they began to grasp the veracity of the downturn.

“Their heads are spinning,” she said.

She adds that agents need to have candid discussions with sellers about current prices.

“Psychologically, they have to be brave enough to tell them ‘this is the price right now’.” It’s the best we can do,” she said.

Ms. Battle no longer sets an ask price below market value with an offer date. These days, she chooses a price slightly above her current market value estimate.

“We no longer see five to six offers on homes in any price range.”

Ms Battle recently sold a three-bedroom house at 31 Lorraine Gardens in Etobicoke for $5.2million after listing it for an asking price of $5.3million. The property with a back pool sold out in about a week, she said.

“The madness is gone. We all knew it wasn’t viable. Don’t bet on madness for a very, very, very long time.

— Realtor Leslie Battle

“Your days in the market are going to be longer for sure,” she warns sellers. “We’re going to go with an offer and negotiate like hell.”

As for affluent buyers in enclaves such as Kingsway and Baby Point, they aren’t being shaken by one- or two-point interest rate hikes, she says. But they are very price sensitive and very sophisticated, she says.

“They are looking for their dream home. »

Languishing properties in the area were overpriced, she adds.

Ms. Battle says some people considering a sale are on pause, but one of the challenges they face in deciding whether to list now or wait is that the market outlook after Labor Day is so unpredictable.

His best guess is that sales will stabilize and prices will stabilize.

She advises sellers not to expect a return to the madness of early 2022.

“The madness is gone. We all knew it wasn’t viable,” she says. “Don’t bet on madness for a very, very, very long time.”

The market downturn comes as consumer confidence weakens and interest rates rise.

The Bank of Canada’s latest survey of consumer expectations shows that people are increasingly worried about the cost of living. Many on Bay Street believe the quarterly survey results will increase pressure on the Bank of Canada to raise its key interest rate by 75 basis points when policymakers meet in mid-July.

Short-term consumer inflation expectations hit a record high in the second quarter, notes Priscilla Thiagamoorthy, an economist at Bank of Montreal. Respondents indicated that they expect prices a year from now to be 6.8% higher year over year.

Consumer expectations for long-term inflation have also increased.

Leslie Preston, senior economist at the Toronto-Dominion Bank, says the Canadian economy has outperformed its advanced-economy counterparts so far this year, but the survey suggests consumer spending in real terms is likely to slow over the coming months because wages cannot keep up with inflation and households are already forced to save.

Elli Davis, a real estate agent at Sotheby’s International Realty Canada, gets calls from serious sellers and others who are just testing the waters.

People who say, “I’m going to see if I can get $4 million for my house – if I can’t, I’m not selling,” aren’t ready, she says.

She says deals can still close quickly if landlords are realistic.

In June, Ms. Davis sold a three-bedroom unit in Granite Place in downtown Toronto to buyers who were downsizing from a larger home. Unit 1505 was listed with an asking price of $3.75 million. The 2,385 square foot unit sold for $3.725 million in seven days, she says.

Some sellers resign themselves to the fact that bidding frenzies are rare these days. She recently heard of a condo owner who put his unit on the market on and off for over a year with different agents. He expressed frustration with the lengthy process, but Ms Davis says she will recommend that he find someone else if he doesn’t take her advice.

Ms. Davis says salespeople with unrealistic expectations waste agents’ time and resources.

“It’s clearly too expensive,” she says. “I’m not going to take it too expensive.”

As for the mindset of buyers, Ms. Davis sees more caution these days. Many people also take a break for summer vacation and time at the cottage.

She expects a calm month of July, but there are always people who need to move, she underlines.

Current concern over interest rate hikes is overblown, she adds, pointing to a time when mortgage rates were 14-16%.

Still, she doesn’t believe buyers who plan to stay in their homes long-term have any reason to panic.

“It’s a correction, but it’s not drastic at this point,” says Davis. “Maybe it’s not radical.”

Your home is your most valuable asset. We have a week Real estate newsletter to help you stay up to date with housing market news, mortgages, the latest closings and more. Register today.

Previous Office project planned for Washington Park area in Milwaukee
Next Princess Diana dated the forgotten Wimbledon star during her marriage to Charles | royal | New