More than half of all Toronto area listings in January were taken down — evidence of a wild market where the right price is a mystery.
An Etobicoke detached two-bedroom home was first listed for $1.059 million in the spring of 2022, just when the first cracks in Toronto’s red hot real estate market started to appear. Throughout the year it was terminated and re-listed three times for tens of thousands of dollars less, before finally selling for $835,000 earlier this month. It is just one example of a recent trend that can make the selling experience seem like a version of the game show The Price is Right. There’s been a huge rise in terminated listings, which some realtors say is due to confusion and unrealistic expectations for pricing in a topsy-turvy market.
Terminated listings, an umbrella term for those that have expired, been suspended or cancelled, or failed to close, shot to about 55 per cent of listings in the GTA this January, compared to 19 per cent in January 2022, according to data from property website HouseSigma. “It’s a very common tactic in real estate, instead of doing a price change with an existing listing you take down the listing and then re-upload,” said Michael Carney, HouseSigma’s director of business development. Some sellers are just pulling their listings down, “holding the line” because they want the prices they saw closer to the market’s peak. “If the sellers have the option to hold on or to rent it out or basically whether the storm, then they’re electing instead to terminate the listing or try to put it on to the rental market or sell at a better time,” Carney said. In January 2022, 1,381 listings in the GTA (or 19 per cent), and 770 in Toronto (about 24 per cent) were terminated, according to HouseSigma data.
By January 2023, although there are far less listings overall, 3,895 were terminated in the GTA (about 55 per cent) and 1,169 (about 57 per cent) in Toronto proper. That’s slightly lower than in December 2022, 4,222 (59 per cent) in the GTA, and 1,839 (61 per cent) in Toronto, but still a huge rise year over year. Nasma Ali, founder and realtor at One Group, said much of this is due to what’s called price discovery. Usually, a realtor advises clients to price their home similar to recent sales of comparable properties in the same neighbourhood. But with a changing market and so few sales overall, that has now become tricky.
“The problem with the declining market, or this kind of weird unstable market, unprecedented and all of that, is just that we don’t really have any real benchmark for prices,” Ali said. “Those terminations, a bigger chunk of those are by people who are really just trying to figure out, what’s the right price?” The average price of all Toronto houses and condos has plunged from $1.33 million at the February 2022 market peak to about $1.04 million in January. But Cailey Heaps, CEO and broker of record at The Heaps Estrin Team said these drops are not consistent and some properties continue to see bidding wars and competitive prices.
The GTA market is now “performing as these little micro markets,” and there are “segments” including the luxury market in central Toronto, that are “outperforming the peak,” she said. Her team “definitely did see an increase in terminated listings over the last six months of 2022,” though. Some of these were properties that clients pulled down in the spring, based on their advice that prices were falling from the peak. They advised others who did list but had not sold by November to take down the listing for the historically slow holiday period and regroup in the new year. “Some of the people that we did that for, and we are relisting, are now coming into a much stronger market.
January and early February has proven to be so much stronger than the latter half of 2022,” Heaps said.
By May Warren | Housing Reporter
Wed., Feb. 15, 2023
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