The way real estate is transacted in Ontario is not exactly clear if you aren’t an insider. In fact, it can be quite difficult for the general public to tell what is happening with a listing on the market.
- Is it holding back on offers until a set date or is it willing to review offers at any time?
- Is the list price reflective of what the sellers want or is it below market value?
- Is the home still available or has it sold and just not been updated?
- Is this the first time it’s been listed or is it a relist?
Given the above questions can’t be answered by anyone but a real estate agent, it isn’t surprising that we often have our buyer clients ask us what’s happening with a particular listing.
As the market in the GTA has shifted in the past few months, the last question on the list above has become much more pressing – did the home fail to sell in prior listings? It also brings up other questions like, what were they originally hoping to get as a sale price, and how long have they been trying to sell the home? These are important questions as it gives us insight into how the seller might be feeling, what they might be willing to accept and how we could best proceed with an offer.
In a market where we are going from a seller’s market to a balanced market, or even a buyer’s market, we see more homes fail to sell the first time around. Whether it is simply a matter of more competition resulting in the home being overlooked, or sellers (and agents) who haven’t adjusted to the new market conditions, higher number of properties are relisted after an unsuccessful initial attempt.
The Toronto Regional Real Estate Board released a research brief at the start of June that looked at how many homes are actually failing to sell now and what is the typical rate in more “normal” market conditions.
In May 2022 the average percentage of homes that hit the market that were relists was a whopping 26.4%. More than a quarter of the listings that came on the market in the GTA in May were listings that had failed to sell, terminated the listing, and relisted again.
In the ten-year period from 2011 to 2021, the average monthly re-list percentage was about 16%, which means we saw it go up by 10% in May 2022. Put another way, we typically see 16 out of 100 homes fail to sell and relist, whereas now we’re seeing 26 out of 100 homes that don’t get sold on the first listing.
That 26% is the average across all of the GTA including Toronto, but there is considerable variation in different communities. The highest rate of resales in the GTA is 35.5% and the lowest rate is 17.7%. Here is the breakdown of where sellers are having the hardest time selling homes and need to adjust their approach in a second or third attempt.
As we look at these stats, a number of things pop out.
Durham Region sellers are having a tough time.
The average relist share in Durham Region is the highest within the GTA, at just over 31%. This number is actually a little understated, as low-volume communities like Scugog and Uxbridge are pulling down the average for the region as a whole.
When we remove those two communities, we have close to a third of all listings in Durham that are failing to sell the first time around. Whether they priced too high and had to adjust their price down, or tried to hold back offers for a set date and didn’t get the offers they wanted, one out of every three sellers have had some unhappy conversations with their agent.
Toronto sellers are still doing OK.
The average relist share in the City of Toronto is just over 22%, making it the best place to sell a home the first time around in the GTA. It’s pretty consistent across all of the city, so we aren’t seeing the core continue to do well but the outlying areas run into issues.
While Toronto may be doing well compared to the rest of the GTA, it has to be a rude awakening for those 22 out of ever 100 listings that didn’t get the sale price they wanted the first time they listed the home. It can seem like Toronto is immune to market forces that push down prices, but the reality is that the city is still being impacted to a certain extent by this shifting market.
Georgina sellers are definitely not happy.
The dubious honour of the highest relist share percentage in the GTA belongs to Georgina, the northernmost municipality in York Region. In May 2022, almost 4 out of every 10 listings on the market was in fact a relisting. 81 of the 212 listings that hit the market that month in the township were another attempt by those sellers to get their properties sold.
Georgina’s 38.2% relist share definitely contributed to the 29.1% relist share in York Region, and that overall average was enough to secure York as the 2nd highest relist share area in the GTA. Markham did the best in York that month, with “only” about 25% of the listings being relisted properties.
In real numbers, there were about 18,500 listings that came on the market in the GTA in May 2022, and almost 5,000 of those were in fact relisted properties. In a more typical market, only about 2,800 of those would have been properties that failed to sell the first time around, so we are definitely seeing a strong increase in the number of unhappy sellers who saw their first attempt fail.
It seems quite likely that June will see even higher numbers of relisted properties and if the market continues to shift towards a buyer’s market as predicted, then July and beyond will see the trend continue. If you’re thinking about buying or selling real estate, you owe it to yourself to work with agents who understand what is happening and can get the job done. If that sounds appealing, don’t hesitate to get in touch with us.