Toronto real estate agent Shane Little says he’s having to have “frank conversations” with his seller clients — homeowners who have a vivid recollection of what he calls the “FOMO” market that characterized the pandemic year, and the two or so years following.
It wasn’t all that long ago, and the chaotic conditions are imprinted on many peoples’ minds: 2020 brought on the global pandemic, leading the Bank of Canada to cut the policy interest rate from 1.75% to 0.25% by March 2020, putting into motion a frantic period of buying and selling — a turn of events that is unlikely to repeat itself anytime soon. In March 2022, the central bank reversed course, and kicked off what would be the first of 10 interest rate hikes in a row. Rates aside, the uncertainty surrounding tariffs has rendered the market more or less stunted, and unable to rebound in any material way as market stakeholders had once hoped.
“We’ve told some people, if they don’t absolutely need to transact right now, it might not be the best time,” says Little, who works alongside Jenny Simon with buyers and sellers in East Toronto. “We are going into this eyes wide open, and having those hard conversations very early in the process. Our job is to get the most out of what the market will bear, but the people we’re working with right now have a real need to move.”
The fact of the matter is that the average Greater Toronto Area (GTA) home price — at $1,022,143 — is now down over 23% from the February 2022 peak of $1,334,544, according to Toronto Regional Real Estate Board (TRREB) data released last week. Month over month and year over year, prices came down almost 3% and over 5%, respectively, in August.
On top of that, the GTA is by and large in “underbidding territory,” according to recent data from Wahi. The real estate proptech company revealed last week that 98% of neighbourhoods across the region with at least five home sales in August saw the bulk of those properties sold for under-asking, with Eastlake, York Mills, Rural Vaughan, Vales of Humber, and Forest Hill leading the charge. Conversely, the only neighbourhoods where the median sold price exceeded the median list price, according to Wahi, were Milton, Markham, Princess Rosethorn, and Brock Ridge.
In other words, it’s time for GTA property owners to accept something of a blanket truth about today’s market: The price you want to get for your home is unlikely to be the price you do get for your home. Home pricing is cyclical, and the most recent decades-long upswing ultimately doesn’t change that.
This is a reality that many sellers are still coming to terms with.
“The people I’m finding are that are having the most resistance are either the people that bought during [the 2020-2021 frenzy] and are now hoping to recover their costs. And then also the people who wanted to sell at that time, but decided to hold off because they thought prices would get better,” says Anya Ettinger, an agent with Bosley Real Estate.
“I also can’t place 100% of the blame on sellers, because I think that there are some agents that are not educating the sellers on accurate expectations,” Ettinger adds. “There’s kind of a trend of, call it, ‘buying the listing,’ where agents will tell sellers an unrealistic price just to get the listing. And so if they think a house is worth 1.1 million, and they know the seller wants 1.2 million, then they’ll tell them it’s worth 1.2 million, so that they’ll hire them. And then it sits on the market for months and ends up inevitably selling for 1.1 million.”
If there’s one thing to takeaway from the market’s status quo that agents like Little and Ettinger are reckoning with it’s: how you price your home matters more than ever. Buyers have options, and that means the market, for sellers, is particularly unforgiving.
“Unless it’s someone you’ve worked with in the past and know you can trust or was a direct referral from someone you know and you have some sort of trust with them… I would say it’s helpful to always meet with a couple of agents,” Ettinger says. “If you see one person and only one person gives you a price, it’s very easy to get excited by that. But if you see two, three who are saying 1.1 [million] and then one agent is saying 1.2 [million], then it kind of makes you wonder if that person is really giving you the honest truth.”
“Another thing is having the agent physically tour your property,” she adds. ”I can’t tell you what your property’s worth if I’ve never stepped foot in it, I can tell you what a similar property could sell for in a large range depending on conditions of the house. I had someone reach out to me recently — and he said that he had reached out to several agents, and none of them wanted to actually physically see the house. They just wanted to give him a price and get the listing. They didn’t want to take the time to tour the house. That, to me, is a red flag.”
Across all cases, Little expresses that pricing your home to sell is “a bit of an art and science” — and a crucial one at that.
“One of my favourite metrics to look at is median price in that specific neighbourhood for that specific home type. […] Like, what are detached homes doing in the Beach; what are the semi-detached homes doing in Leslieville; what are row homes doing in Riverside?” he says.
“In combination with the absorption rate, and understanding… [your] specific home type — because it does vary, and that was unique early in this year because you had detached homes in the Beach that were buyers’ market, semi-detached homes were in a sellers’ market, and condos were in a buyers’ market — you have to be granular. You have to be hyper local.”
Little also points to a recently successful sale of theirs at 87 Berkshire Avenue. “There was a four- to six- week period, in the beginning of the year, where every semi in Leslieville was pricing at $1.199 million and was selling for around $1.4 million — just over and over again. And so our buyers were… getting disenfranchised a bit,” he says. “So with Berkshire, we purposely priced it under that, at $1.149 million, to try and get some more excitement, we ended up actually selling for $1.435 million.”