With 70 per cent of homes in the Greater Toronto Area (GTA) selling for below list price in August, the underbidding trend in the GTA continues — and the Durham Region is no exception.
In August, only 13 per cent of Durham neighbourhoods were in overbidding territory, down from 27 per cent in July and 52 per cent in June. An additional 10 per cent were selling at asking while 77 per cent were selling below list price.
The trend in the Durham region real estate market is consistent with what’s happening in the Greater Toronto Area, which saw a greater share of homes selling for under-asking on both a month-over-month and year-over-year basis.The percentage of GTA neighbourhoods with homes selling below list price increased from 82 per cent in July to 89 per cent in August.
Despite declining interest rates and a surplus of listings on the market, homes sold for less than list price are accounting for a growing share of overall sales in the GTA. Consecutive interest rate cuts and lower mortgage rates have not lit the proverbial fire under would-be homebuyers, while house hunters are seeing greater affordability and selection of listings compared to almost any period since the interest rate tightening cycle commenced in 2022.
The Top-5 Overbidding Neighbourhoods in August 2024
Only five neighbourhoods were in overbidding territory last month in Durham Region, with Whitby taking the first and third spot for most overbid neighbourhoods, followed by Oshawa, Clarington and Ajax. Downtown Whitby was the most overbid neighbourhood with a median sold price of $760,000 and a median overbid amount of $10,100.
When a neighbourhood is in overbidding territory it doesn’t necessarily mean that every home is selling above list price. Instead, it’s a general reflection of overall market behaviour, which can be influenced by seasonal factors, for example, or decisions by sellers, such as to list homes below market value to try to attract more bids.
The Top-10 Underbidding Neighbourhoods in August 2024
Four of the top-10 underbidding neighbourhoods in August are in Whitby, followed by two in Pickering. Uxbridge was the most underbid neighbourhood with a median sold price of $1,100,000 and a median underbid amount of -$38,000.
Generally speaking, the more active listings in a particular neighbourhood the more underbidding there can be because buyers have more bargaining power. The number of active listings makes competitive pricing more essential when selling a property.
At the end of each month, Wahi compares the differences between median list and sold prices to determine whether neighbourhoods are in overbidding or underbidding territory, excluding those neighbourhoods with fewer than five transactions in a given month. In August, there were 39 Durham neighbourhoods where there were at least five home sales. The top overbidding and underbidding neighbourhoods are ranked by the median overbid or underbid amount. The median overbid and underbid amounts are calculated by subtracting the list price from the sold price of each individual listing in a given neighbourhood. These are then ranked by the median of all subtractions and presented as the median overbid or underbid amount.
Note: Benjy Katchen, the author. is the CEO of Wahi, a digital real estate company that redefines the homebuying experience by putting more power into consumers’ hands. By combining cutting-edge tech and market data with expert realtors, Wahi offers unmatched access to insights, tools and the team that makes buying a home faster and easier.
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