Last night in Roncesvalles, a house on a very popular street had a set “offer date” and received six offers.

Who says the market is cold, right?

Sure, we could surmise that if this was January of 2022, there would have been eight offers.  Or ten.  Or twelve.

And we could also speculate that this house would have sold for more money in January of 2022 as well.

But it’s not the number of offers or the price that’s noteworthy in this story, but rather the content of these six offers themselves.

The six offers were all similar in one particular way, and this similarity, ironically, is the difference between this year and last.

Do you know what I’m talking about?

Some of you can hazard a guess.

All six offers were conditional.

That is how, among other reasons, the market in 2023 is different.

But now that January is in the rear-view mirror, I can’t help but look back at what was possibly the oddest month I’ve seen in real estate in quite some time.

What can we possibly say that January was?

It was slow.  I think we can say that.

But slow, how, exactly?

When the TRREB stats are released on Friday or Monday, I believe that January of 2023 will show the fewest sales in any month of January in the last twenty years.

Well, let’s say almost.

For some strange reason, there were only 2,670 sales in January of 2009.

But the second-fewest sales since 2002 were the 3,968 recorded in 2019.  And there’s absolutely no way we see that many sales in January of 2023.

My ‘gut’ is telling me we’re going to see around 3,000 sales.  It’s just a number I’ve had in my mind since the year began, and I’ll be shocked if there’s more, but not surprised if there’s less.

But in January of 2009, despite only seeing 2,670 sales, there were a whopping 10,360 new listings.  That’s a sales-to-new-listings ratio of a paltry 25.8%.  I don’t think I’ve ever seen an SNLR of 25.8% in all the time I’ve been writing about real estate.

When the TRREB stats are released for this past January, I believe that the 3,000’ish sales will likely come with 6,000 to 7,000 new listings, meaning an SNLR of 40-50%.

What I mean to say is that the reason our market is slow isn’t that nobody wants to buy, but rather because there’s so little for sale.

Here’s a screenshot from an “offer night” on Wednesday:

This isn’t uncommon.

No, we’re not seeing January-2022 prices, nor are we seeing 21 of 23 offers submitted without conditions.

But we are seeing action in this market, wherever houses are being offered for sale.

Here’s a house I showed out in Milton:

That’s far from the norm out there, but it’s happening.

And here’s one that a colleague sent me in Richmond Hill:

I’m not attempting to paint a pretty picture of the market but rather provide some actual context, because so much of what’s being discussed, based on what’s being written, is inaccurate.

Case in point, this headline which I didn’t want to talk about today because “any publicity is good publicity,” and this publication goes out of its way to provide misleading and erroneous information about Toronto real estate as a strategy to attract disenfranchised Torontonians as readers, but nevertheless…

I have a very good relationship with the mainstream media.  I always have.  I’ve done literally hundreds of newspaper and television interviews and continue to do so when called upon.

But at the risk of ruining any working relationship that I could ever have with BlogTO, I can’t stay quiet on this one.

This headline is the worst piece of “journalism” I’ve seen in my nearly twenty years in this industry.

So look, I’ll say it.  I’ll put in print what we all know: BlogTO caters to broke millennials and Gen-z’ers who hate real estate because they can’t afford what they want.

But I don’t blame BlogTO, if we’re being honest.  That’s how media works.  You have to pick a side.  Pick an angle.  Pick a slant.

A great example down south is how Fox News caters to the right and MSNBC caters to the left.  It’s strategic.

Here, you could argue that the Toronto Sun caters to the right and the Toronto Star caters to the left.

I don’t like those labels, but it is what it is.

And there’s so much competition online for the eyes and minds of Torontonians that you simply can’t remain neutral in what you produce.

So BlogTO routinely puts out articles about how bad the real estate market is, and if you read the comments, you’ll see that 9/10 people are angry, hate real estate agents, hate the banks, hate investors, and are waiting for the market to drop 50% to what would be “fair.”

But this isn’t accurate.

It’s nowhere close.

And if you want to tell me I’m biased because I sell real estate for a living, I’ll accept it.  But whereas I actually work in the real estate industry, not to mention went to school for commerce and economics, I can’t stand watching food critics and culture reporters write “articles” about real estate that are about as accurate as the headlines in the National Enquirer.

This is what many Torontonians are reading and this is where many many Torontonians are gaining their insights and information about the Toronto real estate market.

So let’s let the data speak.

When the TRREB stats are released, we’ll see what inventory levels look like and we’ll go from there.

In the meantime, the conclusion that I drew from January is that there’s a war going on in the market and the two participants are buyers and sellers.

But it’s not like modern warfare.  It’s more like WWI, for those that consider themselves history buffs.

It’s a war of attrition.

Both sides are dug in.

Trench warfare, per World War I.

And as was the case in the early-1900’s, neither side is getting anywhere.

To illustrate, let’s use some words to describe both buyers and sellers in this market:

Sellers: stubborn, uncompromising, wishful, ignorant

Buyers: stubborn, uncompromising, wishful, ignorant

Oh, wait, they’re the exact same words.  That’s awkward…

Sellers are stubborn right now.  They’re refusing to accept this market for what it is.  They want yesterday’s price.  They want last year’s price.  They are wilfully ignorant about the market, where it was, where it is, and where it’s going.  Their wishful thinking about a quick rebound, a bountiful spring, or a “desperate buyer” is clouding their judgment.

Buyers are stubborn right now.  They’re refusing to accept this market for what it is.  They want a better price.  A different price.  They want the market to fall more, but they don’t want to wait for that to happen or to risk that it won’t.  They’re thankless for the decline in prices that’s taken place and they’re expectant of future declines that have yet to happen in a market that’s moving sideways and where inventory is thin.

Who would have thought that the two sides could have so much in common?

Last week, a colleague of mine told me about a phone call he received from a prospective seller in Leaside.  He said that she felt her house was worth “at least” $4.2 Million, and he told her that a house “like hers” hasn’t sold in Leaside for over $4,000,000 since last January.

He told her that the current market value is likely about $3,700,000 and that the $4,200,000 figure she has in mind is probably “higher than last year, and prices, as we know, have dropped.”

She immediately replied, “Not in Leaside, they haven’t.”

He gave a “huh?” as a knee-jerk response.

“Prices haven’t dropped in Leaside,” she said.  “They may have dropped elsewhere, but not here.”

You see, this is the mindset of every seller out there.

Every seller has something special.  “You have to see it to believe it,” a home-owner told me last December as he regaled me with details of his positively average and unspectacular home.

Sellers have invented this scenario in which, despite the GTA average home price declining 20% from the peak, representing a 20-30% decline in the suburbs and a 10-15% drop in the central core, their houses haven’t been affected.

Another colleague called me this week to shop a “pocket listing.”

She told me about the property: a 1,250 square foot, 2-bed, 3-bath, great building and location, but awful floor plan and layout.

I said, “Before you tell me what your client wants, may I guess?”

She agreed.

“This building has traded in the $1,100/sqft range,” I told her.  “This unit is bigger, it’s got the 2-storey variety and huge ceilings, but it’s a bad layout and you said it hasn’t been touched in twenty years.  My guess is that it’s worth about $1,300,000 but your guy is going to want $1,400,000.”

Then I paused and waited for a response.

None came.

I actually had to ask, “Hello?” to make sure she was still there.

“I’m here,” she said.  And that’s when I knew she had paused for fear of providing me with a response.

“My guy is looking for about $1,600,000,” she said.

“Of course he is!” I responded.

“But why not $1,700,000?” I asked.  “Why not $1,800,000?”

So many Toronto property owners are looking at real estate as a lottery right now, but one with a guaranteed prize!

It’s one thing to want last February’s price, but it’s another thing altogether to want a price that takes last February’s figure and adds ten or twenty percent.

And this is happening everywhere right now.

There are no shortage of examples of sellers and listing agents that are being irrational about the market, but there’s a property that I’ve seen listed over and over, so frequently that every time I see a “new” listing come out in this building, I merely assume it’s the same unit.

Have a look:

If you listed your condo for sale nine times in two years, would you eventually realize that the market isn’t the issue?

The amazing thing here is that the “peak” of the market was February or March of 2022 and this condo was listed for $729,000 from February 7th through May 7th, and it did not sell.

Despite knowing today that prices are down since then, the seller has re-listed at $727,900 this past week.

Oh, and that’s also after re-listing in June, September, and November at the same price.

This makes absolutely zero sense.  It’s literally the definition of “futile.”

But this is how many sellers are acting right now and it doesn’t seem like it’s going to change.

I might have written about this particular house in the fall, but amazingly, it’s still relevant…

Clients of mine were eyeing a house that had been listed for $3.5 Million, was reduced to $3.4 Million, then finally reduced to $3.3Million.

They began looking last summer but knew that, if they were going to make their “last move” into a twenty-year home with their young children, they were in no rush, and wanted to see what would happen to the market.

Eventually, the house was re-listed for $2,999,9000, but with an offer date.

They went to the open house and the agent even told them, “We’re expecting well over the list price.”

The agent followed up with me and asked if we had any interest and I told him, “They’re looking at this house as though it were $2,999,000.”

He didn’t follow up again.  He didn’t even bother with the ole’, “Hey man, bring me an offer on our offer night, you never know…”

That was a sign that those efforts would be pointless, and sure enough, the day after the failed offer night, the house was re-listed for $3.3 Million.

I watched this house sit on the market all through the fall until the listing finally expired at Christmas.

And when the house was re-listed in January, can you guess what they re-listed for?

$3.3 Million.

This isn’t the agent.  This is the seller.

This is a seller who says, “I’m going to get what I need to get.”  Or maybe it’s “want” to get.  But regardless, whether the seller is independently wealthy, or financed this with no debt, or is down to his very last penny, he’s going to hold firm at his price.

His price is not market price.  If it were, the house would have sold.

But determining market price is not an easy task!

Is this house worth $3.2 Million?  You would think so, or less.

Is this house worth $3.1 Million?

Who am I, or who are you, to say this house is worth $3.0 Million, but isn’t worth $3.1 Million?

If a house is truly worth what somebody is willing to pay for it, then we won’t know what this house is worth until somebody buys it.

But we do know what it’s not worth, and that figure is $3.3 Million.

The buyers aren’t going to buy at that price.

The seller isn’t going to sell for less.

And therein, the war of attrition is demonstrated.

Therein, the entire month of January in the Toronto real estate market is summed up!

Buyers want more.

Sellers want more.

And the market only moves when buyers and sellers agree on price, thus one reason why we will see so few sales when the TRREB data is released.  The other reason, of course, is the lack of inventory on the market.

Due to pressure from agents, TRREB has started to track re-listings as a metric, so we could start to look at sales as a percentage of net new listings as opposed to simply new listings.  I do feel that, this past January, we saw a lot more houses re-listed after failed offer nights, so if we see 7,000 or 8,000 new listings, I’ll know that data is inflated!

So until Monday (or Friday if TRREB steals my thunder and releases the data…), we’ll just have to keep guessing on the hard data, and telling stories from the trenches about the soft data.

Stories about what’s actually transpiring in the market, based on agents interacting with buyers and sellers, making offers, going on listing appointments, and working in the field.  As opposed to also-ran stories that pale in comparison to the sensationalized headlines we continue to see in suspect online “news” publications.

But don’t expect that to change.

Have a great weekend, everybody!