Although having an offer night appears to have become normal practise in Toronto, the sales tactic is beginning to fail for some of the city’s realtors.
According to a new research from Strata.ca, realtors are starting to see an increase in the frequency of condo units being re-listed after the offer date has passed. The offer date is the specified period when the seller would accept offers on the property. And it’s not just because they’re hoping to get a better deal by waiting a little longer.
“I’m seeing offer dates listed by overly optimistic listing agents, but then many of those same listings are being put back on the market at a higher price a week later,” said Strata.ca realtor Cyrus Ghazvini. “It’s likely because no offers came in on offer night, period.”
When using an offer night technique, the home is typically priced below market value, forcing hopeful buyers to compete frantically to guarantee they’ve submitted the greatest offer. Receiving upwards of ten offers on offer night has become commonplace in the last year.
Condos in the GTA have increased in value by 20% in the last year, owing in part to inventory levels being at a 25-year low, which has heightened competitiveness. However, much of this price increase, according to the research, is due to a “natural snapping back” from pandemic pricing.
“During this adjustment period, there’s often a lag where sellers still believe they may get a minimum of five to 10 offers on their property,” the report reads. “But this is certainly a different market from the one we saw back in March, which saw condo values jump by 11% in just three months alone. So in practice — some sellers, particularly those without the coveted smaller units or suburban townhomes, are seeing far fewer offers or simply none at all.”
The GTA condo market has recently cooled slightly, although it’s mostly limited to units with two bedrooms or more. Indeed, according to the research, many high-quality two-bedroom properties in desirable neighbourhoods aren’t garnering as much attention as they once did. Smaller units, on the other hand, are still in high demand, and there are far fewer of them on the market. Surprisingly, there is a lot of competition for condominium townhouses in the suburbs.