The Waiting Game: GTA Condos Taking More Than 3x Longer To Sell

“Don’t wait to buy real estate. Buy real estate and wait.”

This quote from Robert G. Allen’s bestselling investment books refers to waiting months or years to buy property. But with the number of ‘days on market’ (DOM) now averaging 28 across the GTA, up from 8 in February, buying and selling with a patient and informed strategy can be the difference between a champagne toast and getting burned.

Sales steady, despite rising supply and surging interest rates

I love that quote from Allen because it is TRUE — and pretty much anyone who bought a condo suite or townhome in the GTA before the COVID-19 pandemic will back me up on that. Average prices have increased by nearly 30 percent since April 2020, while the cost per-square-foot (PSF) had jumped by more than 35 percent before starting to tail off earlier this year.

Asking ‘why’ is a big part of what we do at Strata. And in the case of the 16-percent dip in cost PSF since January, the cause lies in the growing inventory of condos and waning demand. This is especially true as inflation reached historic highs, and aggressive interest rate hikes the market.

Despite that, it’s actually quite remarkable that condo values have remained as stable as they have. But much of this has to do with the patience of sellers, who are now waiting longer to accept an offer, on average, than at any point since early 2021.

Patience can pay when DOM drags

As DOM drags on, the likelihood of a price drop increases. Why? Because of the freshness factor. When a listing is starting to become stale, and every interested buyer in the market sees it sitting there, unsold, day after day, a price reduction is the logical next step.

As an aside, the location and type of property can determine when a listing becomes stale. In the downtown core, for instance, a condo starts getting stale at around 10 to 12 DOM. A $2.5 million house in the suburbs, on the other hand, would start getting stale at about 30 to 45 DOM, as the buyer pool is much smaller.

As each day passes, buyers smell blood, and the odds of a seller getting their list price declines. Of course, there are no guarantees that a price drop will be forthcoming. But if and when it does, patient buyers can get a deal in a market where they’ve been very few and far between.

Don’t forget it after sellers reset it

DOM really started to climb across the GTA this past summer, and it was no coincidence that terminated listings also spiked at that time. Although terminations happen when a homeowner decides they no longer want to sell, or when contracts between sellers and listing agents expire before an offer is accepted — pulling a listing from the market is sometimes done to reset an extended DOM to zero. There are no rules against this sneaky strategy. But by keeping track of listings even after they’re terminated, or by working with savvier agents whose job it is to do exactly that — buyers can factor a listing’s true DOM into their offer price. (It’s worth noting that on Strata.ca, you can see the listing history.)

Playing to the power of DOM

Because DOM can have such a profound effect on bidding, Strata agents use detailed market data to determine how to position a listing to net the best possible price. Listing on a Wednesday or Thursday, for instance, provides enough time for word to get out about a new listing before the weekend. Doing this also ensures the DOM is still low enough on the weekend — when statistically a seller has the highest probability of receiving an offer — to give the seller more leverage should they receive an offer.

This is also why we do our best to avoid listing on the weekend or on a Monday. The weekend is when house-hunters attend open houses. And Monday is when everyone gets back to work, thus putting their search on hold for a day or two.

That’s right: Even in real estate, Mondays are the worst.