It’s official. It’s a bubble!
What scares the heck of me, beyond the 22% Y/Y appreciation, is the nature of sales these days. In speaking with agents I see a few clear and worrisome trends.
First, “bully offers” have become the norm these days when they used to be the exception. Bully offers are aggressively high offers that bidders submit before the official offer date. For example, a seller and their agent will market the home as accepting offers on a set date (usually Tuesday), but bidders will come in with preemptive offers shortly after the listing goes to market, canceling out the stated Tuesday offer night. Basically if you’re trying to purchase a home in Toronto you can’t react quickly enough since the bully offers come in so fast, leaving many interested parties no time to react.
.. Since 1999, the Teranet-National Bank Toronto Home Price Index has risen an incredible 200%. In contrast Japan’s home price index rose 193% in the 17 years prior to its peak, and the US S&P/Case-Shiller National Home Price Index rose 152%
.. I have to run now. I’m interviewing some real estate agents to give me a quote on what my home is worth. Who knows, maybe Garth has rubbed off on me and I can convince my wife to sell our home and lock in a massive profit. These type of gains don’t come along too often in life!