Disconnect in the Greater Toronto Area Real Estate Market

You can't escape the news articles, blog posts and outcries on social media about todays crazy housing market.   Here's some insight into what's happening now from the perspective of an active, full-time and high producing Realtor. 

The economics of why prices are so high:  simply put, low supply and high demand, fueled by the low cost of borrowing!   And this supply/demand issue is also putting pressure on the rental market as well.  

Advice from a listing Agent - The public likes to lay blame for this crazy market on agents.  Simply put, we are tasked to get the highest price for our sellers when we take a listing.   Right now the psychology of buyers in this market, for better or for worse is that:

  • underpricing a property slightly brings in more buyers 
  • more buyers who view a home results in more offers
  • more offers usually results in a higher sale price

I have tried listing closer to asking price, and in my experience it results in less buyers viewing the home & fewer offers

Can we always predict the sale price? No, because realistically: 

  • the next buyer (who may have lost out on other properties) may offer substantially more than the last comparable sale
  • the buyer who purchased the last home at 'substantially more' has bought a home, and is now off the market
  • there may be more (or less) homes for sale than before, resulting in more (or less) competition

As a buyer, make sure your Realtor explains all this to you.  Make sure you understand how the seller has chosen to sell the home on offers night - if you don't know, ask!  The more information you have the more you can develop a good offer strategy. 

Advice as a buying Agent -  As a buyer understand there is a disconnect between the List Price and the Sale Price.  What does that mean?  Anyone can set up a true auction and list a home for $1.  If the home is worth $1.3 million - there will be a buyer willing to pay market value for the house. And the seller will not be willing to sell for under market value - make sense? 

I have seen homes in my neighborhood that I value at  $1.3 million be listed for $899,000 and $1,100,000.  Guess what?  They both sold for market value!  The lower list price did not mean that you could scoop up the price for less.  

So make sure you're looking at homes that have sold in your price range as a gauge for what you can buy.  Understand that house will likely sell for more a month from now!  

Multiple offers are usually bell-curved, so don't be discouraged at putting in an offer - If I get 10 offers on a property or 20 offers on a property they are bell curved.    1-2 offers at asking or below (assuming the house is priced below expectation), the majority clustered together somewhere in the middle, and 2 or 3 offers at the top.  So if you are in the running, you have far less competition than you think! 

And yes, I have successfully won an offer where the house was drastically underpriced based on recent sales.  There were 43 offers & my buyer did not overpay based on comparable prices!  

Play the long game - Financially speaking, getting in the market is everything.  If you feel you're over extending yourself with the offer price,  do two things: 

  1. Ask your lender what your monthly payments will be at different purchase prices.  You may be surprised to see that low interest rates and longer amortization periods mean monthly payment differences are lower than you'd expect.
  2. Project 5 years forward.  Would you be able to save the same amount the property will appreciate during that time? (likely not) 

Would open bidding solve the issue? Open bidding has been raised as a solution to this problem for a while.  You may remember that was one of the Liberals housing platforms during the last election. 

You've probably seen this style of live auction that's used in places like New Zealand and Australia. They're experiencing property supply issues there, and open bidding has not solved the issue!  Did you know that prices have risen 16.4% in Australia & 25.9% in New Zealand - and that's when buyers know what their competition is bidding!  Here are some other recent news articles on open bidding.  

Here is a link to why the Financial Post thinks blind bidding will push prices even higher

Here is link to an article on Open Bidding by Global News

Here is a link to an article on Real Estate Practices around the World

Recent Blog Posts

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A disturbing trend I've come across recently is the fraud in the rental space.   As an agent who handles a fair share of rentals; these issues have shown up over several ways this year.   I'll tell you about 3 instances I've had and the red flags that appeared with each! 

When I'm representing a landlord and an application comes in, I spend a lot of time going through an applicants documentation and getting references and looking through their background.  Here's what I do:

  • Call their employer by finding the employer's website and calling through their office to confirm employment.  I don't just call the supervisor on the application
  • Look carefully at the documents to see if they are real; company letterhead & credit reports can be faked or bought
  • Check social media & linked in
  • Call past landlords
  • Make sure there is a building at the address they're currently renting
  • Check that the landlords name and property owners names match.   If it's an apartment building call through the property management company if it's an apartment rather than calling the number provided.
  • Look at the credit report for signs of altering

With those things in mind, let's look at 3 things that have happened to me this year!

1.  Student rental Scam - fake rental and landlord

First of all, you should never have to pay to submit a rental application, or be asked for a deposit before you get a chance to see the place.   These scams are generally ads on sites like Kijijii and Facebook for rentals that look too good to be true.  They also steal MLS listings for homes and advertise them at lower rates.  I came across one recently through a family friend desperate for some student housing.  It was a big scam; and when I called them out they 'protested too much'.    Here's how to spot these scammers:

  • They demand payment to submit a rental application
  • They demand a deposit before you see the unit
  • Makes excuses why they are not available to speak to on the phone 
  • Will only communicate through messenger, text or email
  • The advertised price is way lower than other rentals
  • Their Facebook profile was just created
  • Their Facebook name does not match their user name ID (see the URL) 

2. Fake Rental Applications   

There are some very good forged documents out there.  I had some people submit an application on a lease I was advertising and here's what I found during the checks, among the other checks I did as above :

  • Inconsistencies in addresses on the application
  • Employment letter does not look real - no header or footer with information on the company letterhead

3. Forged Tenacy Papers

I had a call from a gal who had a great story, good employment, good credit, moving to Toronto from outside the city for work, can't come in to look for a place so needed virtual showings.  Could I help her find a place.  Sounds great right?  

Now I don't usually check tenants out before I help them (and I'd helped out a client with an out of town move this year already in a similar situation)  But with everything going on right now, I felt it couldn't hurt to see what her references would say.   So she sent in her application & 

then came the paperwork - the address of her job didn't match up with her story.  The company had never heard of her or her supervisor.  There was even no property listed at the home she had put for her address!  Other red flags for scammers include what she did:

  • get overly upset when called out 
  • provide complicated excuses for 'mistakes' on application forms
  • call the fact checker a liar, unprofessional, etc.

So be careful out there folks! 


A big thank you to the communities of Guildwood, West Rouge & Port Union for the terrific support last Saturday for my Community Shredding Event.  About 30 families participated - and their generous food donations filled our Jeep to the brim!   The food donations were taken straight to Feed Scarborough - the Scarborough Food Security initiative and will be distributed to local satellite food banks in the area.   Judging from the huge line up outside the Manse Rd. food bank Saturday, it's much needed. 

Chartwell Guildwood was my partner for this event and provided the venue and great snacks.  Thank you Kelly & Dianne for your wonderful support.  As always, Papersavers was gracious, friendly, professional and helpful!  

One interesting sideline - My husband, myself, Dianne and Alex from papersavers all grew up within the same area!   Such a big city/small world!