Toronto’s November real estate market was weaker than a year ago. Higher interest rates eroded affordability leading to 11% fewer transactions as new listings increased by 17%. Prices remained stable due to underlying demand from population growth.
Prices will likely soften in the coming months as interest rates will not decline until Spring 2024 at the earliest. Properties are taking longer to sell with one third of properties being re-listed. Sellers are facing stiff competition from other property owners as months of inventory has swelled to over 4 months – a level not seen since 2012. With considerable choice, Buyers are taking their time and able to avoid competing in multiple offer situations.
On December 1, 2023, the new phase of Trust in Real Estate Services Act (TRESA) came into effect which provides new rules of engagement for competing offers. The press reports this as an open offer process when in fact it is not. Previously, sellers and their Realtors could not disclose details of competing offers. Sellers will still have the option of not disclosing any details, which is the same as before; but Sellers will now have the option to disclose certain details of competing offers.
This change was brought about to make the competing offer process more transparent. From my perspective, I don’t think it will help buyers and overcomplicates the simple blind bidding process (which is still an option for Sellers). Opponents of the blind bidding process complained about overpaying for a property with concerns that buyers could have paid significantly more than the next best offer. No one ever made these Buyers pay higher prices so I don’t see the wisdom in establishing guardrails to protect Buyers from themselves. I’ve always advised my clients that in competing offer situations, they need to feel comfortable with their offer regardless of competition and even if my clients are successful, there’s a chance that sometimes when you win, you lose.
This Wednesday morning, a few days after the Los Angeles Dodgers outbid the Blue Jays with a $700 million offer to Shohei Otani, I am curious if they will experience buyer’s remorse. While I cannot be certain, I don’t believe they should complain even if they discover that the next best offer was approximately $100 million less. I think buyers in Toronto’s real estate market should adopt a similar perspective.
Shen Shoots the Breeze
“You will be the same person in five years as you are today except for the people you meet and the books you read.” This quote from Charlie “Tremendous” Jones has stuck with me for more than a decade. I believe this is true and while this year I haven’t read as much I would have liked to, Dave and I wanted to share with you some books that have educated, entertained and enthralled us in 2023.
Shen’s List:
The Warmth of Other Suns: The Epic Story of America’s Great Migration, Isabel Wilkerson
The Headmaster’s Wager, Vincent Lam
New Morning Mercies, Paul David Tripp
Apron Strings, Jan Wong
Vous N’Aurez Pas Ma Haine, Antoine Leiris
Dave’s List:
Small is the New Big, Seth Godin
The Peacemaker, Ken Sande
A Grief Observed, C.S. Lewis
A Year In Provence, Peter Mayle
Golf Magazine The Best Instruction Book Ever! From the Top 100 Teachers in America, edited by David DeNunzio
Although, we enjoy spending time with family and friends, we are intrigued by the Icelandic tradition, Jolabokaflod, the gifting of books to each other and spending Christmas Eve reading a book with a warm beverage by the fire. We would love to hear about what books impacted you.
As this year comes to a close, we are praying for peace, peace in this world and peace in our homes. May the hope of God’s love and sacrifice bring you peace and joy this Christmas season.