Down but not out

The February numbers are in and although the number of sales declined over the previous February, the amount of the decline was less than that in November-January.

Some interesting articles...

Royal LePage says the slump is at the half-way point already. Article

The Globe and Mail probably has the most comprehensive real estate section. Numerous articles worth perusing over your morning coffee. Click Here

Yourhome.ca writes how Spring is the usual barometer for the housing market economy. Article
But I hugely object to their statement that the bidding wars were "gleefully orchestrated by real estate agents". There are bad apples in every bushel. Were some "orchestrated"? I suspect so. Were all 28,000+ Realtors doing it? Not at all.

A bidding war can almost be created at any time, in any market simply by deliberately setting the list price below market value in a neighbourhood. With more than 75% of buyers first looking at houses online before hitting the streets, the Internet has brought these listings in almost everyone's home - even for casual reading. I know several friends who simply love browsing the homes currently on the market. So more people than ever before are looking at these listings and when an unusual bargain hits the market, the multiple offers appear.

As an example, just recently I was involved in a multiple offer situation on behalf of buyers for a nice home in Scarborough. Compared to what else was on the market in Scarborough in that price range, this house was quite the bargain. The result? Seven offers were registered on that house and on offer presentation night, there were over a dozen cars parked on the street with agents and their buyers scurrying back and forth between cars to consult. Nothing about that was "orchestrated by agents" whatsoever.

It's funny but often times, sellers believe that the higher they set their asking price, they'll received a correspondingly higher offer. Not so.

Buyers comparison shop.
The more out of whack the list price is with area comparables, the greater the likelihood that they'll attract low-ball offers or no offers at all.

As the list price moves closer to the real market value, so too, do the resulting offers. And the number of offers will often increase, too!

And when the list price moves *below* market value, that's usually when you're going to get multiple offers and offers that exceed the list price.

So more than ever, in a market with fewer buyers, I advise my sellers that setting a very realistic list price is key to getting the buyers in your door and offers on your table.