Real estate markets and highways are more similar than you may think.
They each have changing characteristics which can make for a pleasant drive or a hellish commute. A relaxing cruise up north or rush hour getting around Toronto.
The Relaxing Cruise
This highway (market) is balanced.
The buyers and sellers are cruising along, both getting to where they’d like to go. Would they like to get their faster with less traffic? Sure. But no one is swerving or speeding or taking unnecessary risks.
“hey…who wants to stop for ice cream?!”
Buyers have decent choice while the sellers can reasonably predict what will happen.
Over-priced your home? That’s ok. You can kind of get away with it in this market…to a point. After all, homes aren’t selling in 2 days at this point. The river is flowing but there aren’t many rapids. All is good.
The Chaotic Commute
This highway (market) is fast-paced with a knife-edge of wiggle room.
Some drivers are anxious while others are weaving and swerving. While Sellers feel the power of an imbalanced market, others are stressed as decisions are made quickly, often without properly checking the blind spot(s).
Pricing is critical in a fast-paced market. A slow-moving home stands out like the Buick Century doing 98 km/h in the fast lane. After all, in a market where homes sell on average in 9 days, 67 days means something must be wonky. Right?
“Daddy…I gotta go peeeeee!! Not now Susie…I can’t get out of this lane!”
The Buyer feels like they’re cruising along and then has their metaphorical doors blown off by one of those fast drivin’ out-of-towners!
You make an offer $67,000 over asking only to find out that you lost by a paltry $43,000.
Decisions on this highway are made quickly. Not a lot of time to decide whether you want to jump out in front of that truck.
Brake lights brake lights brake lights!!
Buyers are changing multiple lanes at a time without signalling. They have to get there before those other cars after all!
Remember. This highway is fast-paced. The lanes are tight with very little shoulder to allow for a flat tire. Errors can be costly.
Sure, you can get to your destination faster but with people changing lanes so quickly, accidents and mistakes can be costly.
“well, it appears our mortgage wasn’t actually approved…”
The Gardiner Gridlock.
Holy crap things aren’t moving.
“We should have taken the GO. I told you we should have parked and took the train!”
We haven’t had a showing in 11 days! Hopefully tomorrow…
Days on the market averages 78 with 32% of all listings expiring. Price reductions and incentives for the buyers are the norm. You want the appliances? Of course…take them all!
Showings are happening several days apart. I mean, it’s a nice house buuuuut…
The Buyer is going to think about it. For a week. Fear of loss? Remind me again what that is exactly?
You have been averaging 9 km/h for the last 20 minutes. If that jack-ass behind me doesn’t get off my bumper I’m going to lose my mind!
Should we have an open house? What about the Toronto buyers? How can we get more people into our home?
If 9 similar homes sold last month and there are currently 48 on the market, you need to be prepared for a longer commute than normal. You’ll get there, but you might have to skip dinner. Or miss the opening of the concert.
Here’s the thing…
All of those conditions can exist on the same highway and in the same market. Look no further than 2020. We have had some chaos followed up by some gridlock which loosened up into some cruising. Then chaos. In any given year and in any given market, a city can have various forms of the same highway scattered from area to area.
You can be riding high in September only to find things grind to a slowdown in December. Meanwhile, another area of the city can cruise right through as if rush-hour didn’t even happen.
The lesson to learn? Be careful and make your moves based on the traffic conditions. Ask the right questions and do the necessary due diligence. Take a pause to double check a concern. Be careful that your leap of faith isn’t an attempt to jump a gap that you can’t possibly clear.
Turning away an offer because it’s too soon? What if…
…many thanks to Brendon Steeves for the photo.