Bidding wars are back at Toronto real estate market

As a rule, spring tends to be the hottest season for Toronto housing market. However, as you have already noticed, rules don’t apply to this year.

That’s why it shouldn’t surprise us that June’s real estate market performance can compete with previous April and May numbers. It looks like we’re facing a late spring in Toronto, according to Scott Ingram from Century 21 Regal Realty. Inc.

Ingram follows the weekly number of units sold for over asking in the 416 area, saying it’s a good way to determine buyer and seller confidence. He admits it can’t be used as an accurate market data, as too many sellers list their homes at a lower price just to cause bidding wars. This measure although could point to market confidence conditions.

In case he’s right, buyers are definitely confident in the market. During the week ending June 14, 44% of homes in Toronto were sold over asking, marking the largest number for this time of year since 2016’s record active summer.

So in spite of the huge job losses and physical distancing rules, the Toronto housing market is still highly competitive.

Ingram says the reason why the number of homes sold over asking is a good way to determine the market confidence is that you don’t even expect bidding wars when the market is down. In other words, in case the market isn’t hot, sellers will tend to list their properties close to fair market value, rather than set a lower price hoping for possible bidding wars.

Such results coincide with a recent report by Zoocasa saying that, according to CREA’s latest monthly data, despite the strong decrease in May home sales, the market competition conditions in Canada are very similar to 2019. It seems that COVID-19 slowed down the market significantly, but couldn’t stop it entirely, and this month is just making it up for the lost spring.