You’ve heard me say this before a hundred times: the slowest two weeks of the real estate calendar, outside of December, has to be the last two weeks of August.
And I still stand by that.
But this past August, however, was an oddity.
While I did see some properties slip through the cracks, as they usually do around this time of year, I also saw a whole lot of action that I never expected to see!
To understand this part of the market, you need to understand just how busy September truly is. Through only four days last week, I was reminded just how quickly things ramp up this time of year.
Consider that the so-called “spring” market really extends through three seasons – winter, spring, and summer, from January to June. The year starts very slowly after the calendar turns on Jan-1, and it takes a couple of weeks for listings to pick up and for buyers to become active. Momentum builds through February, and into March, which is a very busy month. Easter and Passover typically fall at the end of March or early April, and this break divides the “spring” market into the first and second halves. The market usually “peaks” in terms of new listings and sales in the month of May. June is busy, but once the school year is done, and vacations begin, the market slows down.
The fall could not possibly be more different.
Whereas the spring market builds slowly through January and into February, the fall market starts like a bat out of hell the very day after Labour Day. I listed three properties on Wednesday, re-listed two others during the week, and have three more coming out next week. And I’m not a “listing agent” per se. This is simply volume created through the summer.
Across the board last week, I saw quantity and quality.
That sexy brick-and-beam loft for the picky client that couldn’t be satisfied? Last week had it. 3-bed, 2-bath semi-detached under $1M? There were enough to satisfy the appetite. Custom-built homes in the $3.5-$4M range? A couple of new ones that I was able to show to clients who were starving for something that was not a holdover from the spring.
If you wanted it, you got it last week.
And that is what makes the fall market so different from the spring. Like the snap of your fingers, or the pop of a starter’s pistol to begin a race, the fall market just explodes after Labour Day.
And it is for this reason that I question why any seller would list their property in the two weeks before Labour Day. We have this same conversation every year.
Sometimes, the seller has logic behind his or her decision. “There’s so many listings to compete against in the fall, why wouldn’t I try the property now?”
I understand that, but I still disagree with it. The momentum that exists in the fall is contagious. Even if there are fewer listings in August, there are proportionally fewer buyers.
Despite all this, there were a few listings in the last two weeks of August that did really well. Let’s start with one of those stories.
An east-end semi-detached hit the market in the second-last week of August, with offers reviewed just before Labour Day, and I took a couple of condo-dwellers for a look.
This pocket is sort of “in between” areas. It’s not Leslieville, it’s not Riverdale, it’s not the Beach. It’s just there.
The street is beautiful, tree-lined, and not one-way, but it sure feels like it based on the lack of traffic.
With 3-beds, 4-baths, and a deep basement that has a 4th bedroom, this house had just about everything – except for parking.
Listed at $997,900, my target was about $1,250,000, but I couldn’t help be hopeful that the “slow summer” would play a role, and maybe this house wouldn’t get the attention it deserved.
A 4-bed, 4-bath detached had sold in April for $1,290,000, and while I felt that sale was really below market value (listed for $1.2M, it “should” have sailed well into the mid $1.3’s), I felt there was $1.3M upside for this house, but the “value” was probably $1.25M.
Does that make sense?
Consider my favourite real estate saying: “It’s better to over-pay for a house you love, than to under-pay for a house you don’t.”
With no fixed value on real estate, emotion, timing, and subjectivity play huge roles in the sale process, and ultimately, the price.
This was a house that I felt, in a peak market like September, could fetch $1,300,000. But I valued it at $1,250,000.
My clients decided to pass, and we watched from the sidelines.
I received an automated email every time an offer was registered on the property, and my phone did not stop dinging that day.
What felt to me like a 6-8 offer house ended up getting thirteen offers, and it sold for $1,356,000.
So figure this one out.
In a “slow” period of the market, with offers being reviewed right before the long weekend, a property receives double the offers it woulda, coulda received, and sells for a massive premium. What gives?
Market bears don’t want to hear this, but I think the market is simply more resilient than ever. It’s tough to catch the market sleeping, and when you do, it’s not through chance.
During that second-last week of August, a once-in-a-generation property was listed for sale in the east end.
A blog reader who I had exchanged emails with a few times reached out and said, “I’ve been driving by this house for three years, waiting for the day that there’s a ‘FOR SALE’ sign on the lawn. Help me buy this house!”
I love stories like this. I mean, what are the odds? This is kind of a famous house, and it really is a once-in-a-generation opportunity. You take somebody who’s literally been driving by the house every day for three years, fantasizing about buying the house, renovating to her own tastes, and living there for three decades, and you wonder what the chances are. Slim, in case you’re playing along at home. Houses like this don’t come up for sale with the regularity of a Milverton Boulevard semi.
I went to meet the would-be buyer at the house, and in what was one of the bigger surprises of my summer a blog super-fan showed up to greet me. She was a friend of the house-stalking, would-be-buyer, and proceeded to tell me she’s been reading my blog for ten years. She knew every post, every controversy, and a hell of a lot about real estate!
The house was everything the three of us expected it to be. It needed work, but that was the plan.
Buying the house was what my client described as a “no-brainer,” but she and her friend both couldn’t help but ask the obvious question: Why did they list the house NOW?
Logic would dictate that this house would do exceptionally-well on the market in September. So why was it listed now?
There was another, perhaps even bigger question hanging over us: Why don’t they have an offer date?
Have you ever heard of “the buyer’s curse?”
There are several examples of this, such as going out for the very first time and finding the dream house. It’s a a blessing, but it’s also a curse. I mean, who wouldn’t want to find their dream house right away? But to the buyer, it’s a curse, because they wish they’d already seen twenty houses so that they could feel as though the long, drawn-out search bore fruit. How about when you expect ten offers on a house that you’re bidding on, but it only gets two? Blessing, yes. But you start to wonder why other buyers aren’t interested. You wish there was a ton of action on the house, but you could still pay the same price as though there wasn’t. Classic example of the buyer’s curse.
So here we are, standing in front of the dream home, with that too-good-to-be-true vibe in the air.
Why were they listing now?
Why wasn’t there an offer date?
But the key to overcoming the buyer’s curse is to identify its existence, and then immediately overcome it.
Within 24 hours, we had an offer in on the property, and what’s more is that we were negotiating!
This house, I do believe, in my professional opinion, would have received multiple offers if it were listed in the September market, with an offer date. I also believe it would have sold for $200,000 more than we paid for it in the end.
Because we bought it. And paid under the list price too.
Maybe the seller just wanted it off his plate. Maybe the agents didn’t want to risk losing the listing to another brokerage by telling the seller to wait. Who knows.
But the agents, both who had that “I gotta get to the cottage” vibe in all our conversations, didn’t seem to feel that the price was too low, or the sale was too quick, or that the timing was poor.
And thank God for that!
As I said, you don’t catch the market sleeping by chance. You have to make something happen.
“Play the players,” is another saying of mine. You can’t just sit and let the market take shape around you. If you can play the seller, play the agent, or play both, then you can try to turn the market around.
We had this mantra in mind when some buyers and I submitted a bully offer on an east-end starter home over the long weekend.
This house, in my mind, was a $1,000,000 home. All day.
The list price, however, was only $819,900 which tells me either that the listing agent takes the saying, “You can never list too low” to heart, or that the seller and/or the listing agent weren’t confident in the value.
The question of why they would list the week before Labour Day was brought up again, but as with the last experience, we didn’t dwell on it. We simply acted.
We submitted a pre-emptive offer of $950,000, and it was accepted.
This was at 6:00pm on the Friday of Labour Day long weekend, and with one of two listing agents already up north, I suspect the other one wasn’t far behind!
This one felt extra-special, as I have worked with this family about six times now, and when I sold these buyers’ parents a condo about seven years ago, we realized we had something really big in common.
I remember standing in the condo they were contemplating purchasing, and at some random point during discussions, they mentioned that their wedding anniversary was at the end of August. I told them that was also when my birthday fell, and low and behold, would you believe it was the very same day?
August 30th was not only my birthday, but it was also their wedding anniversary. Incredible!
But that’s not the end of the story. They told me “We started the decade with a bang. August 30th, 1980. And we’ve been together ever since.”
Well how about that?
“Sooo………you guys got married on the very day I was born.”
She smiled, and he sighed.
“That’s so beautiful,” she said.
“God I feel old,” he said.
So when their son and his fiancée purchased a house last week, I wasn’t thinking about how amazing it was that this young couple purchased on my birthday, but rather that they got to celebrate their new home at the family dinner already in place for their parents’ anniversary.
I felt really good about that purchase! These guys got a house that checked every box, and well under budget. Now we get to sell their condo in the prime fall market.
And that is every buyer’s dream, right? You buy a house at a discount, in a slow time period (the long weekend), and then get to turn around and sell your condo in peak season. It doesn’t get any better than that. So they paid $50,000 less for the house than I believe it’s worth, and with time on our side to clean, paint, declutter, stage, et al, I think we’ll get about $40,000 more for their condo than we woulda, coulda, shoulda in late August.
Timing is everything in this market, is it not?
But as I’ve said twice now, it’s not enough to accept the market for what it is – hot or cold, fast or slow. You need to try, whenever possible, to make something happen.
To all the buyers out there this fall, I recommend you take advantage of bully offers. At worst, your offer isn’t accepted, and you have inside knowledge for “offer night” in the form of what price they’ve already turned down. At best, you get a property without having to compete, and/or for less than you might have paid on offer night.
I am not convinced in the average person’s ability to deduce current market value. And that includes buyers, sellers, and both buyer and seller agents.
Some properties sell for far more than they should, or than we ever thought they could. Even in the “slow” dregs of August.
And some sellers might let a property go for less than those of us with more experience know it should sell for, or could, or would – in peak season.
Let’s learn from these late-August experiences, and use the knowledge to move forward in what I think is going to be an insane fall market.