Column: Still Crazy After All These Years

by Shawn Lackie

When the Bank of Canada announced, on April 16th, the interest rates would hold firm, it marked the first time in many outings the status quo was held. Following a series of increases in 2023 and 2024 and then a series of rate cuts in 2024 to now, this marked the first time in many months there would be no change. Don’t expect it to last.

The next rate announcement is June 4th, at which time, it is widely expected the rates will be cut another quarter to half point. For now the policy rate is staying at 2.75 percent, expect that to change.

Inflation decreased from 2.6 to 2.3 percent, in March. It’s anybody’s guess where that will go, with all the antics coming out of the U.S. Canada should have a new leader by the time this story is printed and the government can get back to fighting the 'Orange Menace' to the south of us.

While all this goes on, the housing market is staying as kooky as ever. All three major parties announced plans to battle the housing crisis. While they all made sense, on one level or another, the one thing needed, more than anything now, is some common sense.

Prices are up and sales are down. HUH? Yes, you read that right. Things are really crazy and unpredictable these days. Believe me, I just went through this first-hand with new clients. I was referred a lovely young couple, wanting to get into the market. We spent a Saturday looking at five different homes in the Ajax and Whitby areas. They saw two in particular they liked, and, after much deliberation, decided to make an offer on a Whitby listing.

It was a great idea, except 12 other buyers had the same idea. This modest townhouse, in a nice area, drew 13 offers! The sellers held back offers and ended up with a selling price some 60K over the asking price. At the same time, one of the other five places we saw, but had no interest in, drew 22 offers on presentation day and sold for a whopping 170K over asking price. Now, I know they set asking price low to stimulate the appetite for a bidding war, yet this craziness was what was going on four to six years ago.

We reloaded and went back to the first place we looked at. It was attractive semi in a nice area. They, too, were holding back offers. I recommended we wait and see what happened with the hold back offer date. As it turned out, I got a call from listing agent asking if we were interested. I said yes but not interested in a bidding war. So the date came and went, and surprise of surprises, there were no offers. So, we regrouped and put an offer in at the exact asking price. This is where it got silly. The seller wanted 60K more than we were offering. Yes, you read that right. So, I had to explain to listing agent, once again, the market determines the value of the home. The seller was stubborn so we basically put our absolute best foot forward, at 11K over ask. That was it, no more. We were prepared to walk and made that abundantly clear. So the seller capitulated and accepted our “disappointing” offer of 11K over asking price.

See what I mean? Crazy times. Let’s hope common sense creeps back into the equation, going forward, so this kind of nonsense goes away. I’m thinking, that won’t be happening too soon, but we can always hold out hope.