As the Toronto area's real estate market continues to burn red-hot, bidding wars, record prices, and properties selling in mere hours seem to have become the norm.
But there are signs that the market's torrid pace is starting to slow down.
Scott Russell of Engel & Völkers Oakville shared with STOREYS that his team of advisors is reporting they are seeing fewer buyers come out on offer night -- a major shift from the high-tension, FOMO situation seen happening recently throughout the province and the rest of the country.
Just one month into a spring market most are expecting to be record breaking, this insight is enough to make you wonder (and hope?) if the days of relentless bidding wars are already waging their final battle.
Earlier this month, a semi-detached home in Toronto’s Roncesvalles neighbourhood that received multiple offers -- including two bully offers -- sold for more than $650,000 above asking in just eight hours.
READ: Has Toronto Real Estate Officially Killed the ‘Asking Price’?
But according to Russel, whose agents work in Oakville, Burlington, Mississauga, Niagara-on-the Lake, and "everywhere in between," including Cottage Country, this kind of market insanity simply hasn't been the case over the past few weeks.
Russel explained to STOREYS that while they're used to seeing properties receive between 15 and 25 offers on offer night, there are now "two, three, maybe four people coming to the table instead."
This had Russel asking himself the question, "is this just temporary amid the slowdown period, with buyers waiting?"
"It could be that buyers are waiting to see what comes to the market in May, which is when traditionally a lot more houses come to the market," says Russel. "For example, if someone is trying to sell a home that has a pool, they may be waiting to list because they want to wait and take photos of the property when the weather is nicer."
While this does make sense, Russel explained there could be other reasons at play. "Potentially, some people are just curtailing their searches now and waiting until things open up again."
Russel also speculates there could be fewer offers coming on offer night due to buyer fatigue from crazy multiple offer bidding war scenarios.
According to Anita Springate-Renaud of Engel & Volkers Toronto Central (Don Mills and Yorkville), the trend is also happening in Toronto and, reportedly, fewer buyers are coming out.
“People are not interested in getting into that bidding war,” she says, pointing to a recent example of a house for sale in Barrie, Ont. “They held off on offers and nobody came.”
Though, as Russel mentioned to STOREYS, he doesn't think this is a sign that the market is slowing down.
"I do predict that May will be another robust month once more listings come to market and we get through this lockdown period, as buyers are still actively searching for listings," said Russel, adding that the change in offers is "very dependent on what properties we're talking about, and it varies by price point and location."
When asked if he thinks this new trend could change as buyers become more confident in the market, especially as the vaccine roll out continues, he said he believes the rest of the year will continue to be busy, but there is one factor that could further impact the market.
"One thing we have to be conscious about is the stress test, if they start to increase this on higher ratio mortgages, it could change first-time homebuyers that are able to qualify for a mortgage for the home they're looking at. If that's the case, we could have a shrinkage of the first-time buyer pool."
As always (and just like the pandemic), the Toronto area housing market remains largely unpredictable, and only time will tell how long this offer night trend and 2021 -- and beyond -- will actually pan out.
