As temperatures in the Greater Toronto Area continued to rise in July, homebuyer competition did the exact opposite. Competition for homes continued to decrease in parts of the GTA , including Durham Region.
Only 27 per cent of Durham neighbourhoods were in overbidding territory, down from 52 per cent in June and 79 per cent in May. An additional 2 per cent were selling at asking, while 71 per cent were selling for below list price.
The trend in the Durham Region real estate market is consistent with what’s happening across the Greater Toronto Area, where the percentage of neighbourhoods with homes selling above list price fell to 14 per cent from 27 per cent in June, which was down from 36 per cent in May.
The two back-to-back interest rate cuts have done little to motivate buyers to get back into the market. While Durham Region remains one of the more affordable regions of the GTA, Wahi’s recent analysis suggests that there is even more property selection now than in the past five years. With 10,000 more active listings on the market than a year ago, homebuyers can take their time finding the right home, getting a home inspection, and negotiating more favourable financing terms.
The Top-10 Overbidding Neighbourhoods in July
Five of the top-10 neighbourhoods for overbidding in Durham Region are in Whitby, followed by three in Ajax. Salem Heights, Ajax, was the most overbid neighbourhood with a median sold price of $1,060,000 and a median overbid amount of $51,001.
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 July
Three of top-10 underbidding neighbourhoods in July are in Ajax, followed by two in Whitby and two in Pickering. Kedron, Oshawa, was the most underbid neighbourhood with a median sold price of $1,025,000 and a median underbid amount of -$49,500.
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 July, there were 41 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 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.
You wouldn’t have anything to write about if real estate agents set the price at market value to begin with. Setting the selling price low right at the start just allows for the illusion of overbidding. Someone needs to oversee real estate agents and set some boundaries for them to work within.