Don't Believe The Hype

by Darrin DeRoches June 6 - 12, 2013

This past weekend there was an article written about Hamilton Real Estate Market called Housing Gone Crazy: Bidding Wars and I am a huge supporter of the city but don’t believe the hype. In any market, there are always bidding wars and houses going over asking but you have to look at the other side of the story to really understand what is going on in our housing market. The article is not wrong in its reporting of these situations, the fact that listings are way down, and it is a seller’s market, but let’s not get excited that the market is becoming unaffordable and that all these deep pocketed Toronto buyers are running into town and buying anything they can find.     The situation where a home went $170,000 over asking is a reflection of the situation and not of the market itself. The agent “purposefully” listed it $70,000 under their perceived selling price, which is a risky way to sell a home. This is done to create interest and create the “bidding war”. In this case the home sold $170,000 over asking and in reality $100,000 more than the agent expected. Who cares what they did? It worked this time, but this type of “salesmenship” does not always work and what if the home is priced way under asking and no one offers that price? The house sits and does not sell and when remarketed it is a real hard sale since you have to explain the huge rise in price.     Pricing a home under or over the “real” market price can really mess up a sale and then bring bad press to the market. If this house was priced accordingly and then sold for a great price fast, the owners would still have the sale and money in their pockets but no headlines or story to tell “$170,000 over asking.” You do not read about the houses that sell for the right price and fast. Which is the real story in today’s market. The home that is priced right is getting a lot of attention, maybe multiple offers but most importantly – they are selling quickly. A fast sale is the best indicator of the market. Most agents do not price homes way under value to create headlines but rather price them right and sell them quickly at top dollar. This is what is happening in our market today and that’s what makes it a strong, vibrant market.     The market has not “Gone crazy” but rather it is strong and powerful like the city it is in. I feel bad for all the agents who had calls this week from their sellers quoting the article that the market has gone crazy and asking why their property is not selling. The indicators are showing faster sales and an increase in selling prices, but don’t get caught up in the hype and list your house too high because it will just sit on the market. For every pseudo success story there are five homes sitting on the market priced wrong. V     Darrin DeRoches is a local real estate and mortgage broker. He can be reached to answer questions, comments or stories about real estate experiences through this weekly column at sold@uniquerealty.ca.