May 13, 2025 • 32 mins
In this episode of The Last Honest Realtor, host David Fleming unpacks the April 2025 TRREB data and asks the question that’s on every seller’s mind: Why hasn’t spring sprung?
Despite record-high listings and multiple Bank of Canada rate cuts, buyer activity remains muted. David dives into the growing confidence gap between buyers and sellers, and what this standoff means for the summer and fall markets.
What starts with market stats quickly evolves into a sharp, story-driven look at buyer psychology, seller rigidity, and the misfires that happen when agents don’t set proper expectations. If you’re wondering why listings are piling up and offer nights keep falling flat, this episode delivers the data — and the diagnosis.
In This Episode:
- Why April saw record listings but near-record low sales
- How fear of overpaying is replacing fear of missing out
- What today’s buyers are thinking — and why many are stuck in limbo
- Why sellers are still pricing like it’s 2022
- How unrealistic expectations are tanking otherwise solid listings
Timestamps:
00:00 – April Stats Are In: Listings Surge, Sales Stall
05:00 – Buyer Confidence Is Gone — and It’s Not Coming Back Soon
10:00 – Offer Nights That Go Nowhere: The New Normal
14:00 – Why Sellers Refuse to Lower Prices Even When They Should
19:00 – Condo Inventory, Absorption Rates, and the Myth of “Nothing Is Selling”
25:00 – FOP greater than FOMO: The Psychology Driving the 2025 Market
31:00 – Market Shocks Ahead: Interest Rates, Immigration Caps, and Precon Defaults
37:00 – Fall Forecast: When, Why, and If Buyers Will Return
Also in This Episode:
- A cautionary tale of the $1.25M condo that relisted at $999K — same unit, different strategy
- Why switching agents without changing expectations is a recipe for failure
- What savvy agents are doing right now to actually close deals
Subscribe to The Last Honest Realtor on YouTube or your preferred podcast app. Drop a comment if you're navigating this market — or trying to make sense of it.
Disclaimer: This post contains affiliate links. If you make a purchase, I may receive a commission at no extra cost to you.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
SPEAKER_00 (00:00):
Well, the April Treb stats are in the books, and last
month we saw the most activelistings in any one month in the
history of Treb.
Hello, everybody, and welcomeback to the Last Honest Realtor
podcast.
I'm your host, David Fleming.
Thank you so much for joining mehere today as we look, among
other things, at the most recentTreb data from the month of
April.
But more importantly, we ask andattempt to answer the question,
(00:22):
why hasn't spring sprung?
Now, this is in a real estatecontext, of course.
We're talking about my frontlawn.
Oh boy, it's looking prettygreen.
Now, let's take a trip.
I would actually love to do thatbecause the market's really
stressful.
No, let's take a trip back to,let's say, last summer.
I went on record and I said Ithought that the fall was going
to be busy.
(00:42):
Now, why would that be?
First of all, And I don't wantto make excuses.
It was before Trump and tariffsand all this stuff that happened
this year.
But the Bank of Canada wassignaling a period of
quantitative easing.
They were starting to cutinterest rates.
We figured that many buyerswould get out ahead of that.
Of course, I wrote on my blog inthe fall that I was very wrong.
(01:03):
Yeah, it seems that buyers wantto have their cake and eat it
too.
I use the example...
of a buyer that could, let'ssay, buy a house for$1.2 million
and maybe pay a little bithigher rate than if they waited
six months to get a lower rate,but by then that house would go
up to$1.3 million.
Now, we know that didn't happen.
That's fine.
(01:23):
There were a lot of reasons whythe market has stalled this
year.
But in a declining interest rateenvironment, typically prices do
move up.
So hindsight being what it is,I'm sure there are a lot of
folks that said, oh, well, itwas good to wait.
Now the rates are lower.
But we saw rates declining.
We thought coming off of a peakin 2022, now here we are three
years later, we would see anuptick in activity.
(01:45):
So what happened?
Well, spring of 2025 wassupposed to be this big
comeback.
We did not have a capital gainshike.
There were rate cuts and therewere more on the way.
We have now at least a littlebit of political certainty.
We're through the provincialelection.
We are now through the federalelection.
But instead of these biddingwars and frenzied buyers, a lot
(02:06):
of sellers have found crickets.
Offline, I'm dealing withexactly this right now.
An offer date last night, gotone offer, house didn't sell.
It's very common.
And I am telling my sellers inadvance, hey, listen, it's not
2022.
We have our offer night.
We've done everything that wecan possibly do.
We've got the property ready.
We took all your stuff out.
We put it in storage.
We painted.
(02:26):
We put new carpets in thebasement.
We fixed up that hole in theroof.
Not actually, but proverbially.
And now we're going to see whathappens on the offer night.
They don't always work.
Now, what has happened and doesthis recent stall set the stage
for a bigger fall market orsomething else?
So today we're going to breakdown the psychology, the policy,
(02:47):
and the numbers that explain whydidn't spring spring?
It's a little confusing.
So I'll start with this, guys.
Let's say you came into thisyear full of you-know-what and
vinegar.
Yeah, I try not to swear here onthe podcast.
And like many sellers, youfigured, okay, I'm getting my
house ready for sale.
January is usually a month whenthere's not a lot of inventory.
(03:08):
And you got onto the market.
And you put your property outthere.
You listed it low.
You set your offer date.
It didn't work.
So then you relisted muchhigher.
And then nothing.
So you waited a little while andthen you figured, well, maybe
we'll reduce.
And you did exactly that.
And it was a lot more of thesame, which was nothing.
If you've heard this story once,you've heard it 10 times from
me.
There are properties now thatare on their fifth or sixth
(03:30):
listing.
And I did an entire podcastonce, which was kind of cool,
although maybe a bit repetitive,about a property that was listed
26 times with five differentagents and six offer nights.
This sort of thing happens.
Now, it's not to say that thisnever happened at the peak in
2022, but it is happening a lotmore now.
And we will eventually get intoa lot of the psychology of
sellers as to why that's nothappening.
(03:51):
Now, markets run on confidence.
Who's feeling confident rightnow?
When was the last time youchecked your stock portfolio?
One of my biggest pet peeves isall of the folks that say, don't
look at it.
Just don't look at it.
You know, just don't do it.
I've done that in the last fewpodcasts that bit.
But yeah, when Trump announcedtariffs in the stock market
(04:13):
cratered All the financialanalysts were saying, don't look
at it.
Just don't look at it.
No, you should.
You should know exactly what'shappening.
You should be completely up todate and informed.
But the point I am making isthat as I say that, I'm
expecting some of you guys toawkwardly shift in your chairs a
little bit.
It has been a very, verydifficult and tumultuous year.
We started in January, ofcourse, with Donald Trump
talking about tariffs.
(04:34):
And he came in and he made allkinds of threats leading up to
his inauguration and afterwards.
He set deadlines and then heextended deadlines.
We had a provincial election.
We had a federal election.
Has there ever been a moreuncertain time.
Markets run on confidence andthis spring revealed a profound
confidence gap between buyersand sellers and only one side
can really be right.
(04:55):
It takes two to tango.
I said to an agent last night,surely there is a Venn diagram
that overlaps where my sellerswill sell and your buyers will
buy.
We didn't have that Venndiagram.
For those of you that arelistening, I just removed my
hands from on top of each other.
They did not overlap.
We did not find the area wherewe could come to a deal.
And now, like many sellers outthere, we're deciding, okay,
(05:18):
what do we do next?
So guys, I have a theory and Iwanna run it by you.
Buyers, Like to buy on the wayup.
Buyers would rather pay more andfeel good about it.
And we're talking aboutconfidence.
Markets run on confidence.
And that's the whole theme, inmy opinion, behind why spring
didn't spring.
It is a lack of confidence.
So let me give you an example.
(05:39):
Let's say that a share of stockor the proverbial widget, if
you're from business school, istrading at$100.
Now let's say that it drops to$95 and then to$90, then to$85
and then to$80.
All the while you, the buyer orthe investor, are watching this.
Let's say it drops to 75 andyou're thinking, geez, I could
buy right now.
(05:59):
Then it drops to 70 and you say,thank God I didn't buy.
Then it goes up to 75 and yousay, yeah, no problem.
Markets fluctuate.
Then it goes up to 80.
You're not ready.
You're not ready to jump in.
It's tough.
It's real tough.
There's not a lot of confidence.
It goes up to 85 and you, ohgosh, you want to act.
You do.
You do want to act, but youdon't.
(06:21):
When do you buy in?
You buy in at 92.50.
Now, 92.50, and sure, it goesback up 100, 100, 500, 110, what
have you.
The stock, the house, whateverit is.
You got a deal because themarket went from 100 and you
bought at 92.50.
But the point I'm making is thatyou could have bought at 75 or
70 and you didn't.
(06:41):
Because that is how 99% ofbuyers think.
Markets run on confidence.
And it is so hard for buyers tobuy on the way down.
Buyers want to buy well, well onthe way back up.
Not just in our little examplehere at 76 or 78 or 80.
Buyers want to know.
They absolutely want to know.
(07:02):
that it's on the way back up andit's not coming back down.
So to me, this is sort of theopposite of FOMO.
And if you think back to 2022,people were buying because of
FOMO.
Your friend bought a place.
They're super excited.
And then they told you, oh mygosh, the same unit, two floors
up, just sold for even more thanI paid.
And you're thinking, well, geez,I got to get in.
(07:24):
Now you are watching the market.
You're buying a house inLeslieville.
place sold for one, two, youlove it.
Next place sold for one, two,five, oh my God.
Next place sold for one, three,that's FOMO.
What's happening right now isthe complete opposite, is that
as things are declining, peopleare afraid of things declining
even further.
Now, I'm going to use an examplehere, and some people will
(07:46):
potentially laugh at this, andthat's totally fair.
We just went through anuncertain time.
When was the last time in ourlives, let's say in the last
five years, when we used thatphrase so much, these uncertain
times, these very uncertaintimes.
Well, it was COVID.
And I'm not trying to comparethe last few months to COVID,
but what I want to do is rewinda little bit and talk to you
(08:08):
about 2020.
The average home price inFebruary was$910,000.
And then in March, the worldbasically stopped turning on the
16th of March.
And I remember veryspecifically, I had an offer
date for a condo.
Talk about how times havechanged.
It was in Regent Park.
(08:29):
We listed for$499.
We sold for$625.
I think I had 15 or 16 offers.
And that, to me, will alwaysstand in my head as the last day
before COVID.
Because the next day, the worldstopped turning, basically.
And we were all told to board upour houses and stay inside.
So the March average home pricedropped to$902,000.
Listen to this, guys.
(08:50):
April's price dropped to$821,000.
And then it ticked up a bit.
in May to 863, and then by Juneit was at 930.
Now what happened in there?
The world stopped turningbecause of fear, because of the
great unknown, because of what?
A lack of confidence.
(09:11):
Now before we get into thereasoning for this lack of
confidence in the market overthe last four months, I want to
provide you with some datapoints that really underscore
where buyer confidence is.
or isn't.
Now in January, we saw the thirdfewest number of sales in any
January.
I started tracking the data in2002, so when I say any January,
(09:32):
take that with a grain of salt,we saw the most new listings of
any January since 2002.
In February, it was the fewestsales ever in any Feb, and it
was the sixth most new listings.
Then in March, lowest sales everin March, fourth most new
listings, and then in April lastmonth, oh hey look, It's only
(09:52):
the second fewest number ofsales in any March, except, with
my blue pen I put an asteriskhere, the fewest ever was in
2020 when sales, of course,mentioned earlier dropped to
2,975.
So if you eliminate thepandemic-stricken 2020, we saw
the fewest sales ever in Feb,the fewest sales ever in March,
the fewest sales ever in April,and that April number was not
(10:13):
even close to the second lowest,which of course happened to be
in 2024.
For the record, we saw thefourth most new listings in any
month of April.
So I think I'm driving home thepoint, a real lack in
confidence.
But of course, we now have toask and answer the question,
why?
Now, spring listings surged andbuyer activity underwhelmed.
(10:34):
Showing activity declined.
And this was so noticeable foranybody that had a listing.
So here's what I foundinteresting.
I spoke to a colleague of minethat had three offers on a
house.
She only had 18 showings.
Now, I mentioned earlier alisting that we recently had one
offer on.
We had 20 showings.
(10:55):
But another colleague of minehad 22 showings on her east side
semi, and she had eight offers.
Showing activity is downsubstantially.
And from there, there's no realrhyme or reason to how many
offers you're going to get.
Now, these are all sort of inthat range.
$1 million to$1.3 millionstarter home segment.
Now, price growth, if there wasany, was modest and it was
(11:17):
concentrated in select micromarkets.
As I mentioned, we're talkingstarter homes.
That's where you might see alittle bit of price growth.
I would actually offer that inthe$4 million market, there was
price growth.
Tara and I had a listing inLeaside for$4 million that
people said was drasticallyoverpriced.
We got two offers and sold itfor a quarter of a million
dollars over.
(11:38):
The good properties wereselling, and in the markets
where there's not enough forsale, because of course, we know
there's a million condos, weknow there's a lot of houses,
but if you're looking forsomething highly specific, and
there's not a lot of it, therewill be price growth in that
market.
Now, condo inventory remainshigh, but the absorption rate is
lower than it's ever been.
Now, the absorption rate, forthose not familiar, is basically
(12:01):
the ratio of sales to newlistings.
We call that the SNLR, sales tonew listings ratio, or the
absorption rate.
Anything below 50% istheoretically a buyer's market.
Anything above 50% istheoretically a seller's market.
I say theoretically because allso often we see an absorption
rate at, let's say, 40%, butwe're still seeing a bit of a
seller's market.
It hit 30% last month, and then29%.
(12:25):
And in April, it was 29.7.
So it upticked about 0.7.
So I say February, March, April.
So rate-sensitive buyers areremaining cautious despite the
Bank of Canada signalingpotential cuts.
And then you get into, whichI've already mentioned, the
post-election fatigue.
So leading up to the election, alot of people were paralyzed
with fear.
I mentioned earlier that theopposite of FOMO was essentially
(12:46):
what was plaguing the market.
People in 2022, well, theybetter get in because prices are
going up.
People in 2025, well, I don'tknow if I want to make that move
because prices still might godown.
Now, the buyers and sellersspent early 2025 waiting for
this federal vote, and we neverreally developed any momentum.
Momentum takes time, and this iswhy I mentioned, as we saw
(13:07):
during COVID, that the marketpicked up later, and if it's
going to happen, it's going tohappen after COVID.
the May and June, which isessentially the end of the
spring market leading into whatI think could be a busy summer.
Now the rate cut hesitation.
We thought there was going to bea rate cut last month, and there
wasn't.
We were all surprised by that.
I think for a lot of buyers,that gave them pause.
(13:28):
Divide those buyers into twocategories.
One are the buyers that justabsolutely positively want to
buy when there's another ratecut.
Maybe they're price sensitive,or maybe they've just decided, I
can't buy until I've seen Xnumber of cuts or a certain
rate.
And the others are the ones thatreally, truly thought, you know
what?
If they're not cutting rates,maybe this isn't a good sign.
(13:48):
And again, we go back to thefear.
So seller price rigidity.
We've talked about this a lot onthe blog and a lot in the
podcast.
A lot of sellers are listing at2022 prices and the expectations
are through the roof.
They have resisted reductions.
And from there, I would say thatthere's this sort of erroneous
belief that the market isn'tdoing well, that the market
(14:13):
isn't moving.
But here's a childish example.
If you set up a$20 bill stand,yeah, you're selling$20 bills,
but you're offering them for33.50, sales are gonna be quite
poor.
Now, if at your$20 bill stand,you're offering them for$20, let
alone$19.50, I'd say sales aregonna be pretty good.
(14:35):
So I'm not trying to make anexcuse for this market, but this
erroneous belief that nothing isselling It's because of these
sellers' expectations.
It's because of so many of thesellers that simply will not
accept what fair market valueis.
So with active listings at anall-time high and with sales at
an all-time low, does that notjust seem like a tug of war?
(14:57):
I am not paying$33 for the$20bill.
Why would I?
Now, the takeaway from here isthat this wasn't a rate or
supply issue because rates arelow and supply is high, but it
is a confidence and timingissue.
And that psychology will, infact, dictate the summer and the
fall.
The opposite of confidence isfear.
Now, we have seen fear ofmissing out, which, of course,
(15:19):
can lead to confidence.
In this case is a fear of pricesgoing lower, a fear of making a
mistake that is leading to acrisis of confidence.
So the summer ahead, what arethe signals and what are the
possible shocks?
Talk to me about buyerpsychology, seller psychology,
and the market shocks.
Now, buyers are remainingrate-obsessed and
(15:40):
timing-sensitive, and I feellike there are a lot of folks
out there right now that woulda,coulda, shoulda bought in the
spring and are deciding to do itin the fall.
Many of them do not know why.
Yes, it could be the interestrates, it could be fear, but if
you are buying a house to livein for the next 10 years, I have
always maintained If you get apercent better next month or a
friend of yours buys for 3%better next fall, remember why
(16:02):
you're doing it.
I have a friend of mine that'slooking to rent a place.
And he said, if I miss out onthe absolute dream house during
the year that I'm renting, Iwill be crushed.
And I said, listen, and I'll usesome numbers here.
Let's say you're looking to buya three and a half,$4 million
house.
And let's say you're renting for7,000 a month.
Worst case scenario, five monthsfrom now, you find the dream
(16:23):
home.
You buy it with a two monthclosing and you're eating five
months of rent.
Now,$7,000 a month,$8,000 amonth, okay,$35,000,$40,000, no
one wants to eat that amount ofmoney.
But if you're buying a three anda half to$4 million house, and
you're doing this for the next25 to 30 years, you've gotta put
that into context.
So some of you are gonna say,David, you're absolutely insane.
(16:44):
Why would anyone waste that kindof a money?
But relative to, if you'relosing 40 grand in rent, you're
buying for$4 million, it's a 1%delta.
So the timing is going to bevery important moving forward.
I would also say there's anincreasing reliance on
pre-approval expiries andflexible closing timelines.
So if you're a buyer right now,and I'll give you an example.
(17:06):
I had clients that made an offeron a house in Leaside, but they
need to sell their house.
So obviously, if they need tosell their house to get the
bridge, they need a longerclosing.
We made an offer with afour-month closing.
We lost to an offer for lessmoney that had a 40-day closing.
And my clients couldn'tunderstand.
What do you mean we lost to alower offer?
(17:26):
The sellers wanted that quickclosing, but my clients couldn't
do the quick closing becausethey have to sell their house.
So if you're buying a house andyou're closing on August 30th,
you've got to have your housesold firm probably by August
20th to get the bridge.
Now move that up to June.
It can't be done.
I mean, maybe it could be, butwe need to get the house ready.
(17:46):
And God forbid it takes longerthan three weeks to sell, we're
absolutely screwed.
So the flexible closingtimelines are really important.
And I feel that another reasonwhy a lot of buyers aren't
transacting is that they can'tdo it the way that we're
accustomed to doing.
So if you go back to 2022, youown a one bed, one bath condo,
your partner, you're buying asemi.
(18:07):
Congratulations.
Go out and buy the semi.
And hey, we'll get your condo,get it listed.
We'll set an offer night.
We'll get 14 offers and we'llsell it.
No one ever really thought aboutthe what if.
What if I can't sell my propertyto get the bridge?
That is playing a massive rolein this market.
And that is a real reason whysales are down.
Now, last but not least, thefear of overpaying remains
(18:28):
stronger than the fear ofmissing out.
Fear of overpaying.
What do we call that?
FOOP?
FOMO, fear of missing out.
Yeah, FOPO, fear of overpaying.
I'm going to coin that rightnow.
Now, as for the sellerpsychology, the sellers are
resisting price reductions, anda lot of them are testing the
market for longer than usual.
Now, I had one seller.
(18:49):
We put their condo on themarket, and they're overseas.
And I had said to them, condosare taking a lot longer to sell.
A lot of them, it's taking 60days.
At 30 days, I said, guys, we'vehad two showings.
We need to do something aboutthis.
And the seller said, we're in norush.
You said 60 days.
Talk to me then.
Yeah.
Yeah.
Okay, they're not exactly out ofline.
(19:10):
That's what I told them.
But we only had two showings.
We've got to make the listingmore attractive.
So at 60 days, I said, guys, wehave not had a showing since I
talked to you last.
We had two showings in 60 days.
And they said, yeah, but we'rein no rush.
Now, they can crunch the numberson that.
What are you losing in rent?
(19:30):
Or if you don't want to look atit that way, what is your
mortgage interest plus yourmaintenance fees plus your heat,
hydro, and utilities?
And maybe if I said we need toreduce the price$25,000, they're
thinking, well, it only cost me$2,000 a month to carry it.
Everybody's different.
And I'm not trying to push thislisting out the door, but I am
saying we're not gettingshowings.
It was a price that You know,somewhere between what I said
(19:51):
and what they ultimately wantedto do.
And eventually we did reduce it.
But they were in absolutely nohurry to do that.
I would say that that is aclassic example of testing the
market.
Now, some motivated sellers arequietly switching agents or
preparing for relisting in latesummer.
I saw a listing lately.
This was fascinating.
(20:12):
It's a condo, it's pretty nice.
It was at 1,250,000.
I showed it to a client, didn'treally like it, but I was like,
this isn't 1,250,000.
They didn't reduce, didn'treduce, didn't reduce.
Then I got an email from alisting agent and said, we have
taken over this listing and weare graciously reviewing offers
on this date.
So let me get this straight.
(20:32):
The seller switched agents andthen they took the 1,250,000
listing, priced it 999 and havean offer date.
Is that really the best ideayou've got?
So you switched agents, but it'sthe same property.
You switched strategies, butthere's the same intrinsic
value.
So this property is worth 1-1.
If you go to an offer date andyou get 1-1, will you sell?
(20:56):
In this case, probably not.
Now, there's a noticeable gapbetween asking prices and buyer
value of perception, and that iscontinuing to widen in certain
neighborhoods.
So I go back to the Venndiagram.
What does my seller want to sellfor and what does my buyer want
to pay?
Slap those two things over topof each other and that is your
intersection of value.
And from there, you cannegotiate one way or the other
(21:17):
to find out exactly what it'sgoing to sell for.
But if those two things are notoverlapping, the property is not
going to sell.
Now that gap is continuing towiden.
I think buyers are being verychoosy.
And I know we're on sellerpsychology now, but if I could
go back to buyer psychology, Iwould say that buyers are being
opportunistic.
So if you see a house youabsolutely love, it's at$9.99,
you go to the offer date.
(21:39):
Yeah, time was easy, 1.2513.
Seller's looking for 1.2.
You're the opportunistic buyer.
You're not offering$9.99 becausethat's crazy.
We know it's not worth that.
But you're going in, you'reoffering 1.1.
Take it or leave it.
The seller's not going to takethat.
I mean, it's worth more thanthat.
But does the seller want torelist?
Have they bought a house?
Do they need to sell?
(21:59):
And the buyers in that case arebeing opportunistic.
And go back to the sellerpsychology here.
The sellers are saying, this isunfair.
We should sell on offer night.
And I feel like a lot of theagents aren't preparing the
sellers for that reality.
So when I have a listing, I setup a call with the client before
we go to market.
And I lay out what I expect.
How many showings?
(22:20):
How many requests for the homeinspection?
What's the process like?
What are we looking for?
And then the night before ouroffer date, I'll do the same
thing.
I'll set up a phone call andI'll say, guys, this is how the
offer date works.
These are our pros.
These are our cons.
Worst case scenario, best casescenario, what I think is going
to happen.
And they're not caught offguard.
But what I'm finding a lot ofthe time is that When there are
no offers on a house, thesellers absolutely lose their
(22:41):
mind because the agents didn'tprepare them in advance.
So the potential market shockshere.
We have the Bank of Canada Junerate decision.
Now, even a modest cut couldpotentially jolt buyer urgency
or confirm market caution ifthey hold the rate steady.
I believe they are going to cut,and I believe that that is a
signal that there will be Morecuts later in the year.
(23:01):
The banks, of course, as theyalways do, will continue to
revise their forecasts.
It's easy to say that weexpected 3% by the end of the
year, but you know what?
Now that rates have come down,we're going to revise our
forecasts.
We expect 2%.
I love how the banks do that.
The best Monday morningquarterbacking I've ever seen.
Imagine if you could go and beton the New York Yankees to win,
and then they lose, and then thenext day you're like, no, no, I
thought it would be the BostonRed Sox.
(23:22):
So we're going to see a lot ofthe banks revising their
forecasts.
And at some point, at somepoint, When rates are so low,
the buyers will come back.
Now, immigration permit caps.
A lot was made of this duringthe election.
Details are expected in the latesummer, but this could sway the
rental market demand andpotentially get some investors
back into the market.
I think the investors areprobably going to be later, at
(23:44):
least as it you know, the 99% ofinvestors.
Some of them are already back inthe market.
Some of them are picking offunits because they're seeing
value and they're looking for15, 20-year time horizons.
The mom-and-pop investors,though, they're falling into the
bucket of people that areafraid.
And last but not least, thepre-construction defaults.
A lot has been made of this.
I've done podcasts and blogs onthis, not to say I told you so,
(24:06):
but that proverbial house ofcards, people paying$1,700 a
foot for pre-con when prevailingresale is selling at$1,100 a
foot.
And guess what?
Now they can't close.
It's not just the fact thatthese things are falling through
that's a problem.
It's the fact that the media iswriting about it constantly.
So a lot of the media doesn'tdifferentiate between
pre-construction and resale.
(24:27):
And if you're the average condobuyer and everything in the
media is negative condo,negative condo, you're not
differentiating.
That alone is enough to scareaway buyers.
So I think that's something tolook for moving forward.
Now, navigating the fall market,what should buyers be doing?
Well, if you're a buyer, you useyour leverage.
(24:48):
You look for the seller thatneeds to sell, target listings
with longer days on market, haveyour agent feel them out.
There's still a lot of reallybad agents out there that are
acting like it's 2022, but I'vegot a condo that's been on the
market for 120 days.
An agent called me the otherday, she said, are your clients
flexible on closing?
I said to her, listen, I'm theone agent that's going to work
(25:10):
with you more than anybody else.
We're very flexible on closing.
Bring us an offer.
We'd love to work with you.
On the flip side of that isagents just start yelling into
the phone.
And they think that that's whatnegotiating is.
And they think I need to takethe leverage back.
Don't overestimate yourposition.
The goal is to get the propertysold.
And there are agents all overthe city that are chasing away
buyers and buyer agents.
(25:31):
Now, buyers are looking tosecure rate holds.
But they will remain nimble ifrate cuts are delayed.
I think that for buyers, youreally need to do the math and
look at what is it going to costyou today versus six months from
now?
And how much are you paying inrent?
And what is your anxietypremium, let's say?
(25:51):
I always use the example ofsomebody that's pregnant and
it's like, well, you can't stopthat baby from coming.
But no, I would just say thatit's not purely an investment.
You live in the house.
Ultimately, would you be morecomfortable in this house for
the next six months and maybegive up the potential for a
lower rate down the road?
Now for sellers, navigatingwhat's ahead.
If listings are underperforming,consider adjusting the strategy
(26:12):
now and not in September.
I do have one client.
He said, I want to take it offand I want to put it in the
market in the fall.
I said, no problem.
What's the logic there?
He said, well, the fall is goingto be better.
I really hope it is.
And I've made a pretty goodargument here today for why it
will be.
But what if it's the same?
Or what if it's not?
Now, this is somebody that ismoving overseas forever.
That's it.
(26:32):
We're selling.
There's an argument to be madethat you should do it now, work
with the devil you know, ratherthan the devil you don't.
And there's an argument to bemade that you've got nothing but
time to wait.
Now, for sellers, focus pricingon the buyer psychology today,
not for a hoped-in falloptimism.
I think that goes withoutsaying.
I think you have to understandwhere the buyers are and leave
that little trail of breadcrumbsfor them.
(26:53):
Because the buyers right now,they're being opportunistic, as
I've mentioned.
The buyers understand that whenthere's one offer on an offer
night, the seller doesn't haveleverage.
And it's fascinating to mebecause I made an offer on
behalf of a buyer the othernight.
On the offer date, we made theoffer.
We're the only offer.
And the seller said, listen,we're not in a position to take
this.
I said, I know, I understand.
(27:14):
Sign it back.
We're ready to work with you.
That listing agent said, whywould we sign it back?
You come up.
Okay.
Walk me through that logic.
We've made you an offer.
No, no, no.
We have an offer night.
That's not how offer nightswork.
Okay.
So you don't want to sign ouroffer back?
(27:35):
We don't have to.
We have all the power here.
No problem.
I said, you have our offer.
You let me know what you want todo with it.
I never heard back from thatagent.
Never heard back from thatagent.
What in the world is that about?
So sellers...
Understand that buyer psychologyand prepare for a potentially
competitive fall if the stalledspring sellers relist en masse.
(27:57):
There were 27,386 activelistings last month.
I have that number etched in mybrain because that is the most
ever.
As that continues to increase,the competition is going to put
the buyers in the driver's seat.
Now for investors and foragents, watch for the distressed
or motivated sellers quietlytesting the waters off market.
Sure, why not?
(28:18):
And you know, it's funny, thereis a strategy where you take a
house, you put it on the market,and if it's not selling, you
take it off and you offer itprivately.
Now, why would someone do that?
Because days on market, and Iput it right here, target
listings with longer days onmarket, and I'm talking about a
particular house and we sataround the corner, if days on
market rack up, you loseleverage.
Now, as a strategy, what somesellers are doing is they're
(28:40):
saying, take it off the marketand then let people call you.
That particular house, Iactually had a client from the
US, I called the agent, I said,Is this still available?
The agent said, yeah, I guess.
That agent created leveragebecause they took it off the
market.
That was a very savvy move.
Now for agents moving forward,you need to stop seeing the
(29:01):
agent on the other side of thetransaction as an adversary and
start seeing them as a partner.
Because the deals that aregetting done right now are the
deals that are done with twolike-minded agents that are
courteous, professional, andunderstanding.
Far too often right now, what Iam seeing are agents on the
other side that are beingaggressive.
Now, some of them know they'vegot a dog listing.
(29:23):
They've got a seller that'smassively overpriced and that
they feel that they need to pushand punch and scrape and claw
and bring some sort of leverageonto their side.
The other half are just jerks,to be perfectly honest.
But none of those people aredoing transactions.
I mentioned in a previouspodcast, an agent called me and
said, I was going to bring youan offer, but it's going to be
(29:47):
low.
And I said, why wouldn't youbring me an offer?
I don't care if it's for adollar.
Bring me an offer.
That's how we start.
And he said, you know, I've seena few properties with this
client, and I've talked to likethree or four agents, and I tell
them what I want to do, and theysay, don't bother.
I said to him, well, that's notme.
It starts with an offer.
He brought me an offer.
(30:07):
It was very low.
But you know what?
We worked on it.
And it took us five days, but weended up doing a deal.
The agents that are yelling onthe other end of the line, they
are not the agents that aregoing to get the deals done.
Now, a couple of weeks ago, Idid this podcast on sockless
realtors.
Well, not on sockless realtors.
That was kind of the hook.
And it's really a euphemism forthe agents that got into the
(30:29):
business, the young agents I'mgoing to typecasts, Of course, I
was 24 when I got into thebusiness, but the sockless
realtors, the folks that came in2017, 2018 to 2022, selling
pre-construction, just poundingtheir chest, taking pictures in
front of their luxury car anddoing Instagram videos, starting
at 5.30 in the morning andending at midnight, how busy
they are.
I mentioned in that podcast,that stuff's gone.
(30:51):
People don't want to see thatanymore.
What I truly believe is that weare seeing now a return to
professionalism.
And in that podcast, I mentionedprofessionalism A few agents, I
said, Alex Braut, Corey Moran,Ralph Fox, Paul Johnson, a bunch
of people that I really admired.
And some of them reached out,they're like, hey, thanks, that
was really nice.
And a bunch of other agentslisten to the podcast, and
they're like, yeah, I reallylike those guys too.
(31:13):
That's what works in thismarket.
Agents that have an identifiablebrand and a process, and they
aren't trying to do 100transactions.
They're doing the ones thatinterest them, the ones that
they're passionate about.
And as I would say, myself andmy team, we're the exact same
way.
What's not going to work in thismarket moving forward, dare I
say, is the idea of, I don'tknow, a website where agents bid
(31:37):
the commission down and then theseller finds out who won.
Congratulations, Jimmy fromMilton won with a commission
rate of 2.7% for your listing indowntown Toronto.
You just found out who's goingto be your listing agent.
Guys, listen, I'm a full-serviceagent.
I've been that for 21 years.
I don't want to make this into apodcast about why to hire a
(32:00):
full-service agent.
But I don't think now is thetime to be getting Jimmy from
Milton, the part-time Uberdriver, part-time, I don't know,
masseuse in the park, puttingads on Craigslist.
No, seriously, that was a friendof mine once upon a time, who
also happens to have a realestate license and will
literally sell your place for400 bucks.
What's going to sell it are theprofessionals, the ones that,
(32:22):
yes, are going to be They mightbe charging a higher rate, but
they are doing all of the thingsnecessary.
They have a name, they have abrand, and you know what else
they have?
Respect and professionalism.
And those two things, more thananything right now, are what is
getting transactions done.
Folks, thank you so much forwatching as always.
(32:43):
If you're watching this onYouTube, please feel free to
drop me a comment.
I always like reading those.
Wherever you listen to yourpodcasts, Apple Music, Spotify,
please remember to like,comment, and subscribe.
And we'll see you here next timeon The Last Honest Realtor.
Well, the April Treb stats are in the books, and last
month we saw the most activelistings in any one month in the
history of Treb.
Hello, everybody, and welcomeback to the Last Honest Realtor
podcast.
I'm your host, David Fleming.
Thank you so much for joining mehere today as we look, among
other things, at the most recentTreb data from the month of
April.
But more importantly, we ask andattempt to answer the question,
(00:22):
why hasn't spring sprung?
Now, this is in a real estatecontext, of course.
We're talking about my frontlawn.
Oh boy, it's looking prettygreen.
Now, let's take a trip.
I would actually love to do thatbecause the market's really
stressful.
No, let's take a trip back to,let's say, last summer.
I went on record and I said Ithought that the fall was going
to be busy.
(00:42):
Now, why would that be?
First of all, And I don't wantto make excuses.
It was before Trump and tariffsand all this stuff that happened
this year.
But the Bank of Canada wassignaling a period of
quantitative easing.
They were starting to cutinterest rates.
We figured that many buyerswould get out ahead of that.
Of course, I wrote on my blog inthe fall that I was very wrong.
(01:03):
Yeah, it seems that buyers wantto have their cake and eat it
too.
I use the example...
of a buyer that could, let'ssay, buy a house for$1.2 million
and maybe pay a little bithigher rate than if they waited
six months to get a lower rate,but by then that house would go
up to$1.3 million.
Now, we know that didn't happen.
That's fine.
(01:23):
There were a lot of reasons whythe market has stalled this
year.
But in a declining interest rateenvironment, typically prices do
move up.
So hindsight being what it is,I'm sure there are a lot of
folks that said, oh, well, itwas good to wait.
Now the rates are lower.
But we saw rates declining.
We thought coming off of a peakin 2022, now here we are three
years later, we would see anuptick in activity.
(01:45):
So what happened?
Well, spring of 2025 wassupposed to be this big
comeback.
We did not have a capital gainshike.
There were rate cuts and therewere more on the way.
We have now at least a littlebit of political certainty.
We're through the provincialelection.
We are now through the federalelection.
But instead of these biddingwars and frenzied buyers, a lot
(02:06):
of sellers have found crickets.
Offline, I'm dealing withexactly this right now.
An offer date last night, gotone offer, house didn't sell.
It's very common.
And I am telling my sellers inadvance, hey, listen, it's not
2022.
We have our offer night.
We've done everything that wecan possibly do.
We've got the property ready.
We took all your stuff out.
We put it in storage.
We painted.
(02:26):
We put new carpets in thebasement.
We fixed up that hole in theroof.
Not actually, but proverbially.
And now we're going to see whathappens on the offer night.
They don't always work.
Now, what has happened and doesthis recent stall set the stage
for a bigger fall market orsomething else?
So today we're going to breakdown the psychology, the policy,
(02:47):
and the numbers that explain whydidn't spring spring?
It's a little confusing.
So I'll start with this, guys.
Let's say you came into thisyear full of you-know-what and
vinegar.
Yeah, I try not to swear here onthe podcast.
And like many sellers, youfigured, okay, I'm getting my
house ready for sale.
January is usually a month whenthere's not a lot of inventory.
(03:08):
And you got onto the market.
And you put your property outthere.
You listed it low.
You set your offer date.
It didn't work.
So then you relisted muchhigher.
And then nothing.
So you waited a little while andthen you figured, well, maybe
we'll reduce.
And you did exactly that.
And it was a lot more of thesame, which was nothing.
If you've heard this story once,you've heard it 10 times from
me.
There are properties now thatare on their fifth or sixth
(03:30):
listing.
And I did an entire podcastonce, which was kind of cool,
although maybe a bit repetitive,about a property that was listed
26 times with five differentagents and six offer nights.
This sort of thing happens.
Now, it's not to say that thisnever happened at the peak in
2022, but it is happening a lotmore now.
And we will eventually get intoa lot of the psychology of
sellers as to why that's nothappening.
(03:51):
Now, markets run on confidence.
Who's feeling confident rightnow?
When was the last time youchecked your stock portfolio?
One of my biggest pet peeves isall of the folks that say, don't
look at it.
Just don't look at it.
You know, just don't do it.
I've done that in the last fewpodcasts that bit.
But yeah, when Trump announcedtariffs in the stock market
(04:13):
cratered All the financialanalysts were saying, don't look
at it.
Just don't look at it.
No, you should.
You should know exactly what'shappening.
You should be completely up todate and informed.
But the point I am making isthat as I say that, I'm
expecting some of you guys toawkwardly shift in your chairs a
little bit.
It has been a very, verydifficult and tumultuous year.
We started in January, ofcourse, with Donald Trump
talking about tariffs.
(04:34):
And he came in and he made allkinds of threats leading up to
his inauguration and afterwards.
He set deadlines and then heextended deadlines.
We had a provincial election.
We had a federal election.
Has there ever been a moreuncertain time.
Markets run on confidence andthis spring revealed a profound
confidence gap between buyersand sellers and only one side
can really be right.
(04:55):
It takes two to tango.
I said to an agent last night,surely there is a Venn diagram
that overlaps where my sellerswill sell and your buyers will
buy.
We didn't have that Venndiagram.
For those of you that arelistening, I just removed my
hands from on top of each other.
They did not overlap.
We did not find the area wherewe could come to a deal.
And now, like many sellers outthere, we're deciding, okay,
(05:18):
what do we do next?
So guys, I have a theory and Iwanna run it by you.
Buyers, Like to buy on the wayup.
Buyers would rather pay more andfeel good about it.
And we're talking aboutconfidence.
Markets run on confidence.
And that's the whole theme, inmy opinion, behind why spring
didn't spring.
It is a lack of confidence.
So let me give you an example.
(05:39):
Let's say that a share of stockor the proverbial widget, if
you're from business school, istrading at$100.
Now let's say that it drops to$95 and then to$90, then to$85
and then to$80.
All the while you, the buyer orthe investor, are watching this.
Let's say it drops to 75 andyou're thinking, geez, I could
buy right now.
(05:59):
Then it drops to 70 and you say,thank God I didn't buy.
Then it goes up to 75 and yousay, yeah, no problem.
Markets fluctuate.
Then it goes up to 80.
You're not ready.
You're not ready to jump in.
It's tough.
It's real tough.
There's not a lot of confidence.
It goes up to 85 and you, ohgosh, you want to act.
You do.
You do want to act, but youdon't.
(06:21):
When do you buy in?
You buy in at 92.50.
Now, 92.50, and sure, it goesback up 100, 100, 500, 110, what
have you.
The stock, the house, whateverit is.
You got a deal because themarket went from 100 and you
bought at 92.50.
But the point I'm making is thatyou could have bought at 75 or
70 and you didn't.
(06:41):
Because that is how 99% ofbuyers think.
Markets run on confidence.
And it is so hard for buyers tobuy on the way down.
Buyers want to buy well, well onthe way back up.
Not just in our little examplehere at 76 or 78 or 80.
Buyers want to know.
They absolutely want to know.
(07:02):
that it's on the way back up andit's not coming back down.
So to me, this is sort of theopposite of FOMO.
And if you think back to 2022,people were buying because of
FOMO.
Your friend bought a place.
They're super excited.
And then they told you, oh mygosh, the same unit, two floors
up, just sold for even more thanI paid.
And you're thinking, well, geez,I got to get in.
(07:24):
Now you are watching the market.
You're buying a house inLeslieville.
place sold for one, two, youlove it.
Next place sold for one, two,five, oh my God.
Next place sold for one, three,that's FOMO.
What's happening right now isthe complete opposite, is that
as things are declining, peopleare afraid of things declining
even further.
Now, I'm going to use an examplehere, and some people will
(07:46):
potentially laugh at this, andthat's totally fair.
We just went through anuncertain time.
When was the last time in ourlives, let's say in the last
five years, when we used thatphrase so much, these uncertain
times, these very uncertaintimes.
Well, it was COVID.
And I'm not trying to comparethe last few months to COVID,
but what I want to do is rewinda little bit and talk to you
(08:08):
about 2020.
The average home price inFebruary was$910,000.
And then in March, the worldbasically stopped turning on the
16th of March.
And I remember veryspecifically, I had an offer
date for a condo.
Talk about how times havechanged.
It was in Regent Park.
(08:29):
We listed for$499.
We sold for$625.
I think I had 15 or 16 offers.
And that, to me, will alwaysstand in my head as the last day
before COVID.
Because the next day, the worldstopped turning, basically.
And we were all told to board upour houses and stay inside.
So the March average home pricedropped to$902,000.
Listen to this, guys.
(08:50):
April's price dropped to$821,000.
And then it ticked up a bit.
in May to 863, and then by Juneit was at 930.
Now what happened in there?
The world stopped turningbecause of fear, because of the
great unknown, because of what?
A lack of confidence.
(09:11):
Now before we get into thereasoning for this lack of
confidence in the market overthe last four months, I want to
provide you with some datapoints that really underscore
where buyer confidence is.
or isn't.
Now in January, we saw the thirdfewest number of sales in any
January.
I started tracking the data in2002, so when I say any January,
(09:32):
take that with a grain of salt,we saw the most new listings of
any January since 2002.
In February, it was the fewestsales ever in any Feb, and it
was the sixth most new listings.
Then in March, lowest sales everin March, fourth most new
listings, and then in April lastmonth, oh hey look, It's only
(09:52):
the second fewest number ofsales in any March, except, with
my blue pen I put an asteriskhere, the fewest ever was in
2020 when sales, of course,mentioned earlier dropped to
2,975.
So if you eliminate thepandemic-stricken 2020, we saw
the fewest sales ever in Feb,the fewest sales ever in March,
the fewest sales ever in April,and that April number was not
(10:13):
even close to the second lowest,which of course happened to be
in 2024.
For the record, we saw thefourth most new listings in any
month of April.
So I think I'm driving home thepoint, a real lack in
confidence.
But of course, we now have toask and answer the question,
why?
Now, spring listings surged andbuyer activity underwhelmed.
(10:34):
Showing activity declined.
And this was so noticeable foranybody that had a listing.
So here's what I foundinteresting.
I spoke to a colleague of minethat had three offers on a
house.
She only had 18 showings.
Now, I mentioned earlier alisting that we recently had one
offer on.
We had 20 showings.
(10:55):
But another colleague of minehad 22 showings on her east side
semi, and she had eight offers.
Showing activity is downsubstantially.
And from there, there's no realrhyme or reason to how many
offers you're going to get.
Now, these are all sort of inthat range.
$1 million to$1.3 millionstarter home segment.
Now, price growth, if there wasany, was modest and it was
(11:17):
concentrated in select micromarkets.
As I mentioned, we're talkingstarter homes.
That's where you might see alittle bit of price growth.
I would actually offer that inthe$4 million market, there was
price growth.
Tara and I had a listing inLeaside for$4 million that
people said was drasticallyoverpriced.
We got two offers and sold itfor a quarter of a million
dollars over.
(11:38):
The good properties wereselling, and in the markets
where there's not enough forsale, because of course, we know
there's a million condos, weknow there's a lot of houses,
but if you're looking forsomething highly specific, and
there's not a lot of it, therewill be price growth in that
market.
Now, condo inventory remainshigh, but the absorption rate is
lower than it's ever been.
Now, the absorption rate, forthose not familiar, is basically
(12:01):
the ratio of sales to newlistings.
We call that the SNLR, sales tonew listings ratio, or the
absorption rate.
Anything below 50% istheoretically a buyer's market.
Anything above 50% istheoretically a seller's market.
I say theoretically because allso often we see an absorption
rate at, let's say, 40%, butwe're still seeing a bit of a
seller's market.
It hit 30% last month, and then29%.
(12:25):
And in April, it was 29.7.
So it upticked about 0.7.
So I say February, March, April.
So rate-sensitive buyers areremaining cautious despite the
Bank of Canada signalingpotential cuts.
And then you get into, whichI've already mentioned, the
post-election fatigue.
So leading up to the election, alot of people were paralyzed
with fear.
I mentioned earlier that theopposite of FOMO was essentially
(12:46):
what was plaguing the market.
People in 2022, well, theybetter get in because prices are
going up.
People in 2025, well, I don'tknow if I want to make that move
because prices still might godown.
Now, the buyers and sellersspent early 2025 waiting for
this federal vote, and we neverreally developed any momentum.
Momentum takes time, and this iswhy I mentioned, as we saw
(13:07):
during COVID, that the marketpicked up later, and if it's
going to happen, it's going tohappen after COVID.
the May and June, which isessentially the end of the
spring market leading into whatI think could be a busy summer.
Now the rate cut hesitation.
We thought there was going to bea rate cut last month, and there
wasn't.
We were all surprised by that.
I think for a lot of buyers,that gave them pause.
(13:28):
Divide those buyers into twocategories.
One are the buyers that justabsolutely positively want to
buy when there's another ratecut.
Maybe they're price sensitive,or maybe they've just decided, I
can't buy until I've seen Xnumber of cuts or a certain
rate.
And the others are the ones thatreally, truly thought, you know
what?
If they're not cutting rates,maybe this isn't a good sign.
(13:48):
And again, we go back to thefear.
So seller price rigidity.
We've talked about this a lot onthe blog and a lot in the
podcast.
A lot of sellers are listing at2022 prices and the expectations
are through the roof.
They have resisted reductions.
And from there, I would say thatthere's this sort of erroneous
belief that the market isn'tdoing well, that the market
(14:13):
isn't moving.
But here's a childish example.
If you set up a$20 bill stand,yeah, you're selling$20 bills,
but you're offering them for33.50, sales are gonna be quite
poor.
Now, if at your$20 bill stand,you're offering them for$20, let
alone$19.50, I'd say sales aregonna be pretty good.
(14:35):
So I'm not trying to make anexcuse for this market, but this
erroneous belief that nothing isselling It's because of these
sellers' expectations.
It's because of so many of thesellers that simply will not
accept what fair market valueis.
So with active listings at anall-time high and with sales at
an all-time low, does that notjust seem like a tug of war?
(14:57):
I am not paying$33 for the$20bill.
Why would I?
Now, the takeaway from here isthat this wasn't a rate or
supply issue because rates arelow and supply is high, but it
is a confidence and timingissue.
And that psychology will, infact, dictate the summer and the
fall.
The opposite of confidence isfear.
Now, we have seen fear ofmissing out, which, of course,
(15:19):
can lead to confidence.
In this case is a fear of pricesgoing lower, a fear of making a
mistake that is leading to acrisis of confidence.
So the summer ahead, what arethe signals and what are the
possible shocks?
Talk to me about buyerpsychology, seller psychology,
and the market shocks.
Now, buyers are remainingrate-obsessed and
(15:40):
timing-sensitive, and I feellike there are a lot of folks
out there right now that woulda,coulda, shoulda bought in the
spring and are deciding to do itin the fall.
Many of them do not know why.
Yes, it could be the interestrates, it could be fear, but if
you are buying a house to livein for the next 10 years, I have
always maintained If you get apercent better next month or a
friend of yours buys for 3%better next fall, remember why
(16:02):
you're doing it.
I have a friend of mine that'slooking to rent a place.
And he said, if I miss out onthe absolute dream house during
the year that I'm renting, Iwill be crushed.
And I said, listen, and I'll usesome numbers here.
Let's say you're looking to buya three and a half,$4 million
house.
And let's say you're renting for7,000 a month.
Worst case scenario, five monthsfrom now, you find the dream
(16:23):
home.
You buy it with a two monthclosing and you're eating five
months of rent.
Now,$7,000 a month,$8,000 amonth, okay,$35,000,$40,000, no
one wants to eat that amount ofmoney.
But if you're buying a three anda half to$4 million house, and
you're doing this for the next25 to 30 years, you've gotta put
that into context.
So some of you are gonna say,David, you're absolutely insane.
(16:44):
Why would anyone waste that kindof a money?
But relative to, if you'relosing 40 grand in rent, you're
buying for$4 million, it's a 1%delta.
So the timing is going to bevery important moving forward.
I would also say there's anincreasing reliance on
pre-approval expiries andflexible closing timelines.
So if you're a buyer right now,and I'll give you an example.
(17:06):
I had clients that made an offeron a house in Leaside, but they
need to sell their house.
So obviously, if they need tosell their house to get the
bridge, they need a longerclosing.
We made an offer with afour-month closing.
We lost to an offer for lessmoney that had a 40-day closing.
And my clients couldn'tunderstand.
What do you mean we lost to alower offer?
(17:26):
The sellers wanted that quickclosing, but my clients couldn't
do the quick closing becausethey have to sell their house.
So if you're buying a house andyou're closing on August 30th,
you've got to have your housesold firm probably by August
20th to get the bridge.
Now move that up to June.
It can't be done.
I mean, maybe it could be, butwe need to get the house ready.
(17:46):
And God forbid it takes longerthan three weeks to sell, we're
absolutely screwed.
So the flexible closingtimelines are really important.
And I feel that another reasonwhy a lot of buyers aren't
transacting is that they can'tdo it the way that we're
accustomed to doing.
So if you go back to 2022, youown a one bed, one bath condo,
your partner, you're buying asemi.
(18:07):
Congratulations.
Go out and buy the semi.
And hey, we'll get your condo,get it listed.
We'll set an offer night.
We'll get 14 offers and we'llsell it.
No one ever really thought aboutthe what if.
What if I can't sell my propertyto get the bridge?
That is playing a massive rolein this market.
And that is a real reason whysales are down.
Now, last but not least, thefear of overpaying remains
(18:28):
stronger than the fear ofmissing out.
Fear of overpaying.
What do we call that?
FOOP?
FOMO, fear of missing out.
Yeah, FOPO, fear of overpaying.
I'm going to coin that rightnow.
Now, as for the sellerpsychology, the sellers are
resisting price reductions, anda lot of them are testing the
market for longer than usual.
Now, I had one seller.
(18:49):
We put their condo on themarket, and they're overseas.
And I had said to them, condosare taking a lot longer to sell.
A lot of them, it's taking 60days.
At 30 days, I said, guys, we'vehad two showings.
We need to do something aboutthis.
And the seller said, we're in norush.
You said 60 days.
Talk to me then.
Yeah.
Yeah.
Okay, they're not exactly out ofline.
(19:10):
That's what I told them.
But we only had two showings.
We've got to make the listingmore attractive.
So at 60 days, I said, guys, wehave not had a showing since I
talked to you last.
We had two showings in 60 days.
And they said, yeah, but we'rein no rush.
Now, they can crunch the numberson that.
What are you losing in rent?
(19:30):
Or if you don't want to look atit that way, what is your
mortgage interest plus yourmaintenance fees plus your heat,
hydro, and utilities?
And maybe if I said we need toreduce the price$25,000, they're
thinking, well, it only cost me$2,000 a month to carry it.
Everybody's different.
And I'm not trying to push thislisting out the door, but I am
saying we're not gettingshowings.
It was a price that You know,somewhere between what I said
(19:51):
and what they ultimately wantedto do.
And eventually we did reduce it.
But they were in absolutely nohurry to do that.
I would say that that is aclassic example of testing the
market.
Now, some motivated sellers arequietly switching agents or
preparing for relisting in latesummer.
I saw a listing lately.
This was fascinating.
(20:12):
It's a condo, it's pretty nice.
It was at 1,250,000.
I showed it to a client, didn'treally like it, but I was like,
this isn't 1,250,000.
They didn't reduce, didn'treduce, didn't reduce.
Then I got an email from alisting agent and said, we have
taken over this listing and weare graciously reviewing offers
on this date.
So let me get this straight.
(20:32):
The seller switched agents andthen they took the 1,250,000
listing, priced it 999 and havean offer date.
Is that really the best ideayou've got?
So you switched agents, but it'sthe same property.
You switched strategies, butthere's the same intrinsic
value.
So this property is worth 1-1.
If you go to an offer date andyou get 1-1, will you sell?
(20:56):
In this case, probably not.
Now, there's a noticeable gapbetween asking prices and buyer
value of perception, and that iscontinuing to widen in certain
neighborhoods.
So I go back to the Venndiagram.
What does my seller want to sellfor and what does my buyer want
to pay?
Slap those two things over topof each other and that is your
intersection of value.
And from there, you cannegotiate one way or the other
(21:17):
to find out exactly what it'sgoing to sell for.
But if those two things are notoverlapping, the property is not
going to sell.
Now that gap is continuing towiden.
I think buyers are being verychoosy.
And I know we're on sellerpsychology now, but if I could
go back to buyer psychology, Iwould say that buyers are being
opportunistic.
So if you see a house youabsolutely love, it's at$9.99,
you go to the offer date.
(21:39):
Yeah, time was easy, 1.2513.
Seller's looking for 1.2.
You're the opportunistic buyer.
You're not offering$9.99 becausethat's crazy.
We know it's not worth that.
But you're going in, you'reoffering 1.1.
Take it or leave it.
The seller's not going to takethat.
I mean, it's worth more thanthat.
But does the seller want torelist?
Have they bought a house?
Do they need to sell?
(21:59):
And the buyers in that case arebeing opportunistic.
And go back to the sellerpsychology here.
The sellers are saying, this isunfair.
We should sell on offer night.
And I feel like a lot of theagents aren't preparing the
sellers for that reality.
So when I have a listing, I setup a call with the client before
we go to market.
And I lay out what I expect.
How many showings?
(22:20):
How many requests for the homeinspection?
What's the process like?
What are we looking for?
And then the night before ouroffer date, I'll do the same
thing.
I'll set up a phone call andI'll say, guys, this is how the
offer date works.
These are our pros.
These are our cons.
Worst case scenario, best casescenario, what I think is going
to happen.
And they're not caught offguard.
But what I'm finding a lot ofthe time is that When there are
no offers on a house, thesellers absolutely lose their
(22:41):
mind because the agents didn'tprepare them in advance.
So the potential market shockshere.
We have the Bank of Canada Junerate decision.
Now, even a modest cut couldpotentially jolt buyer urgency
or confirm market caution ifthey hold the rate steady.
I believe they are going to cut,and I believe that that is a
signal that there will be Morecuts later in the year.
(23:01):
The banks, of course, as theyalways do, will continue to
revise their forecasts.
It's easy to say that weexpected 3% by the end of the
year, but you know what?
Now that rates have come down,we're going to revise our
forecasts.
We expect 2%.
I love how the banks do that.
The best Monday morningquarterbacking I've ever seen.
Imagine if you could go and beton the New York Yankees to win,
and then they lose, and then thenext day you're like, no, no, I
thought it would be the BostonRed Sox.
(23:22):
So we're going to see a lot ofthe banks revising their
forecasts.
And at some point, at somepoint, When rates are so low,
the buyers will come back.
Now, immigration permit caps.
A lot was made of this duringthe election.
Details are expected in the latesummer, but this could sway the
rental market demand andpotentially get some investors
back into the market.
I think the investors areprobably going to be later, at
(23:44):
least as it you know, the 99% ofinvestors.
Some of them are already back inthe market.
Some of them are picking offunits because they're seeing
value and they're looking for15, 20-year time horizons.
The mom-and-pop investors,though, they're falling into the
bucket of people that areafraid.
And last but not least, thepre-construction defaults.
A lot has been made of this.
I've done podcasts and blogs onthis, not to say I told you so,
(24:06):
but that proverbial house ofcards, people paying$1,700 a
foot for pre-con when prevailingresale is selling at$1,100 a
foot.
And guess what?
Now they can't close.
It's not just the fact thatthese things are falling through
that's a problem.
It's the fact that the media iswriting about it constantly.
So a lot of the media doesn'tdifferentiate between
pre-construction and resale.
(24:27):
And if you're the average condobuyer and everything in the
media is negative condo,negative condo, you're not
differentiating.
That alone is enough to scareaway buyers.
So I think that's something tolook for moving forward.
Now, navigating the fall market,what should buyers be doing?
Well, if you're a buyer, you useyour leverage.
(24:48):
You look for the seller thatneeds to sell, target listings
with longer days on market, haveyour agent feel them out.
There's still a lot of reallybad agents out there that are
acting like it's 2022, but I'vegot a condo that's been on the
market for 120 days.
An agent called me the otherday, she said, are your clients
flexible on closing?
I said to her, listen, I'm theone agent that's going to work
(25:10):
with you more than anybody else.
We're very flexible on closing.
Bring us an offer.
We'd love to work with you.
On the flip side of that isagents just start yelling into
the phone.
And they think that that's whatnegotiating is.
And they think I need to takethe leverage back.
Don't overestimate yourposition.
The goal is to get the propertysold.
And there are agents all overthe city that are chasing away
buyers and buyer agents.
(25:31):
Now, buyers are looking tosecure rate holds.
But they will remain nimble ifrate cuts are delayed.
I think that for buyers, youreally need to do the math and
look at what is it going to costyou today versus six months from
now?
And how much are you paying inrent?
And what is your anxietypremium, let's say?
(25:51):
I always use the example ofsomebody that's pregnant and
it's like, well, you can't stopthat baby from coming.
But no, I would just say thatit's not purely an investment.
You live in the house.
Ultimately, would you be morecomfortable in this house for
the next six months and maybegive up the potential for a
lower rate down the road?
Now for sellers, navigatingwhat's ahead.
If listings are underperforming,consider adjusting the strategy
(26:12):
now and not in September.
I do have one client.
He said, I want to take it offand I want to put it in the
market in the fall.
I said, no problem.
What's the logic there?
He said, well, the fall is goingto be better.
I really hope it is.
And I've made a pretty goodargument here today for why it
will be.
But what if it's the same?
Or what if it's not?
Now, this is somebody that ismoving overseas forever.
That's it.
(26:32):
We're selling.
There's an argument to be madethat you should do it now, work
with the devil you know, ratherthan the devil you don't.
And there's an argument to bemade that you've got nothing but
time to wait.
Now, for sellers, focus pricingon the buyer psychology today,
not for a hoped-in falloptimism.
I think that goes withoutsaying.
I think you have to understandwhere the buyers are and leave
that little trail of breadcrumbsfor them.
(26:53):
Because the buyers right now,they're being opportunistic, as
I've mentioned.
The buyers understand that whenthere's one offer on an offer
night, the seller doesn't haveleverage.
And it's fascinating to mebecause I made an offer on
behalf of a buyer the othernight.
On the offer date, we made theoffer.
We're the only offer.
And the seller said, listen,we're not in a position to take
this.
I said, I know, I understand.
(27:14):
Sign it back.
We're ready to work with you.
That listing agent said, whywould we sign it back?
You come up.
Okay.
Walk me through that logic.
We've made you an offer.
No, no, no.
We have an offer night.
That's not how offer nightswork.
Okay.
So you don't want to sign ouroffer back?
(27:35):
We don't have to.
We have all the power here.
No problem.
I said, you have our offer.
You let me know what you want todo with it.
I never heard back from thatagent.
Never heard back from thatagent.
What in the world is that about?
So sellers...
Understand that buyer psychologyand prepare for a potentially
competitive fall if the stalledspring sellers relist en masse.
(27:57):
There were 27,386 activelistings last month.
I have that number etched in mybrain because that is the most
ever.
As that continues to increase,the competition is going to put
the buyers in the driver's seat.
Now for investors and foragents, watch for the distressed
or motivated sellers quietlytesting the waters off market.
Sure, why not?
(28:18):
And you know, it's funny, thereis a strategy where you take a
house, you put it on the market,and if it's not selling, you
take it off and you offer itprivately.
Now, why would someone do that?
Because days on market, and Iput it right here, target
listings with longer days onmarket, and I'm talking about a
particular house and we sataround the corner, if days on
market rack up, you loseleverage.
Now, as a strategy, what somesellers are doing is they're
(28:40):
saying, take it off the marketand then let people call you.
That particular house, Iactually had a client from the
US, I called the agent, I said,Is this still available?
The agent said, yeah, I guess.
That agent created leveragebecause they took it off the
market.
That was a very savvy move.
Now for agents moving forward,you need to stop seeing the
(29:01):
agent on the other side of thetransaction as an adversary and
start seeing them as a partner.
Because the deals that aregetting done right now are the
deals that are done with twolike-minded agents that are
courteous, professional, andunderstanding.
Far too often right now, what Iam seeing are agents on the
other side that are beingaggressive.
Now, some of them know they'vegot a dog listing.
(29:23):
They've got a seller that'smassively overpriced and that
they feel that they need to pushand punch and scrape and claw
and bring some sort of leverageonto their side.
The other half are just jerks,to be perfectly honest.
But none of those people aredoing transactions.
I mentioned in a previouspodcast, an agent called me and
said, I was going to bring youan offer, but it's going to be
(29:47):
low.
And I said, why wouldn't youbring me an offer?
I don't care if it's for adollar.
Bring me an offer.
That's how we start.
And he said, you know, I've seena few properties with this
client, and I've talked to likethree or four agents, and I tell
them what I want to do, and theysay, don't bother.
I said to him, well, that's notme.
It starts with an offer.
He brought me an offer.
(30:07):
It was very low.
But you know what?
We worked on it.
And it took us five days, but weended up doing a deal.
The agents that are yelling onthe other end of the line, they
are not the agents that aregoing to get the deals done.
Now, a couple of weeks ago, Idid this podcast on sockless
realtors.
Well, not on sockless realtors.
That was kind of the hook.
And it's really a euphemism forthe agents that got into the
(30:29):
business, the young agents I'mgoing to typecasts, Of course, I
was 24 when I got into thebusiness, but the sockless
realtors, the folks that came in2017, 2018 to 2022, selling
pre-construction, just poundingtheir chest, taking pictures in
front of their luxury car anddoing Instagram videos, starting
at 5.30 in the morning andending at midnight, how busy
they are.
I mentioned in that podcast,that stuff's gone.
(30:51):
People don't want to see thatanymore.
What I truly believe is that weare seeing now a return to
professionalism.
And in that podcast, I mentionedprofessionalism A few agents, I
said, Alex Braut, Corey Moran,Ralph Fox, Paul Johnson, a bunch
of people that I really admired.
And some of them reached out,they're like, hey, thanks, that
was really nice.
And a bunch of other agentslisten to the podcast, and
they're like, yeah, I reallylike those guys too.
(31:13):
That's what works in thismarket.
Agents that have an identifiablebrand and a process, and they
aren't trying to do 100transactions.
They're doing the ones thatinterest them, the ones that
they're passionate about.
And as I would say, myself andmy team, we're the exact same
way.
What's not going to work in thismarket moving forward, dare I
say, is the idea of, I don'tknow, a website where agents bid
(31:37):
the commission down and then theseller finds out who won.
Congratulations, Jimmy fromMilton won with a commission
rate of 2.7% for your listing indowntown Toronto.
You just found out who's goingto be your listing agent.
Guys, listen, I'm a full-serviceagent.
I've been that for 21 years.
I don't want to make this into apodcast about why to hire a
(32:00):
full-service agent.
But I don't think now is thetime to be getting Jimmy from
Milton, the part-time Uberdriver, part-time, I don't know,
masseuse in the park, puttingads on Craigslist.
No, seriously, that was a friendof mine once upon a time, who
also happens to have a realestate license and will
literally sell your place for400 bucks.
What's going to sell it are theprofessionals, the ones that,
(32:22):
yes, are going to be They mightbe charging a higher rate, but
they are doing all of the thingsnecessary.
They have a name, they have abrand, and you know what else
they have?
Respect and professionalism.
And those two things, more thananything right now, are what is
getting transactions done.
Folks, thank you so much forwatching as always.
(32:43):
If you're watching this onYouTube, please feel free to
drop me a comment.
I always like reading those.
Wherever you listen to yourpodcasts, Apple Music, Spotify,
please remember to like,comment, and subscribe.
And we'll see you here next timeon The Last Honest Realtor.
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