{"id":239860,"date":"2025-05-13T13:07:23","date_gmt":"2025-05-13T13:07:23","guid":{"rendered":"https:\/\/peraltafinancing.com\/business\/real-estate\/the-condo-market-strategy-that-is-not-going-to-work-in-2025\/"},"modified":"2025-05-13T13:07:23","modified_gmt":"2025-05-13T13:07:23","slug":"the-condo-market-strategy-that-is-not-going-to-work-in-2025","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=239860","title":{"rendered":"The Condo Market Strategy That Is NOT Going To Work In 2025"},"content":{"rendered":"


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Stop me if you\u2019ve heard this bit before, but have you ever considered\u00a0why<\/em> a \u201cplacebo\u201d is effective?<\/p>\n

A placebo is a fake treatment for sickness, illness, or other ailment whereby a pill is given to the affected individual, however, that pill is\u00a0not<\/em> medicinal.\u00a0 It\u2019s sugar or saline and it\u2019s designed to look like a real pill.<\/p>\n

Sometimes, these are used in medical research to measure the effectiveness of an\u00a0actual<\/em> drug versus no treatment at all.\u00a0 The participants in the study are randomly selected to receive the real drug or the placebo, but none of them know which it is.<\/p>\n

Other times, a doctor\u00a0can<\/em> prescribe a placebo in place of an actual treatment, whereby the patient\u2019s condition might improve because the\u00a0belief<\/em> that he or she is receiving treatment is enough to make them better.<\/p>\n

Hence, \u201cthe placebo effect.\u201d<\/p>\n

But what would happen in the above case if a doctor told the patient, \u201cI\u2019m prescribing you a placebo\u201d?<\/p>\n

It wouldn\u2019t work.<\/p>\n

Right?<\/p>\n

The whole point of a placebo is that the patient\u00a0thinks<\/em> it\u2019s real.\u00a0 If the doctor tells them it\u2019s not real, then their body or mind won\u2019t respond as though it is.<\/p>\n

For years, I have always been fascinated by listing agents and sellers who will take property, for example, priced at $1,000,000 but sitting on the market for three months, then list it for $699,900\u00a0with an offer date.<\/em><\/p>\n

The buyer pool already knows the property was listed for $1,000,000, and\/or that the seller wants or expects this amount.<\/p>\n

Listing at $699,900\u00a0with an offer date<\/em> isn\u2019t going to have the intended effect of making the buyer think the property is a deal or undervalued.\u00a0 Perhaps more importantly, listing at $699,900 with an offer date is\u00a0not<\/em> going to make the buyer ask, \u201cI wonder what the seller wants?\u201d<\/p>\n

Because the buyer already knows!\u00a0 The seller has already listed the property at a higher price!<\/p>\n

In a red-hot market, I\u00a0still\u00a0<\/em>loathe this technique.<\/p>\n

But in the market that we\u2019re currently in,\u00a0especially\u00a0<\/em>with respect to condominiums, it makes absolutely no sense to me.<\/p>\n

Check out this listing:<\/p>\n

\"\"<\/p>\n

Alright, so it\u2019s a 1-bed, 1-bath downtown somewhere, and it\u2019s listed for $499,000.<\/p>\n

In my professional opinion, it\u2019s a decent condo.\u00a0 I might not love the exact location, but it\u2019s a fantastic layout for a smaller condo and that\u2019s something that you can\u2019t take for granted these days.\u00a0 The finishes are nice and there\u2019s a great view.<\/p>\n

But there is a\u00a0lot<\/em> of product on the market in this price point.<\/p>\n

So what\u2019s the draw here?<\/p>\n

How does the listing agent and seller move a unit like this, in a market like ours?<\/p>\n

I\u2019m honestly not sure.\u00a0 I don\u2019t think any of us know the answer to that question right now.<\/p>\n

But I\u2019ll tell you what\u00a0isn\u2019t<\/em> the draw, or what\u00a0not<\/em> to do, and it\u2019s this:<\/p>\n

\"\"<\/p>\n

Yup.<\/p>\n

An\u00a0offer date<\/em>.<\/p>\n

An offer date on a 1-bedroom, 1-bathroom condo is already a bad idea.<\/p>\n

But when you consider\u00a0where<\/em> this unit was last week, it\u2019s even worse\u2026<\/p>\n

\"\"<\/p>\n

Yup.<\/p>\n

This unit was listed for $639,000 and was unsold after 37 days on the market.<\/p>\n

First of all, 37 days in the condo market is\u00a0not\u00a0<\/em>a long time.\u00a0 I\u2019m telling my sellers that they have to be prepared for 60 days right now.<\/p>\n

Secondly, the seller has already played his or her\u00a0hand<\/em>.\u00a0 The patient already knows that the pill is a placebo.<\/p>\n

Listing at $499,000\u00a0with an offer date<\/em> is not going to fool the buyer pool into \u201cbidding\u201d the price up to $639,000, or thereabouts.<\/p>\n

You know this.\u00a0 I know this.<\/p>\n

But why doesn\u2019t the listing agent know this?\u00a0 Why doesn\u2019t the seller know this?<\/p>\n

Feel free to ask, \u201cDavid, is there any chance that the seller\u00a0would<\/em> consider an offer of $499,000?\u00a0 Is\u00a0that<\/em> why they listed at this price?\u201d<\/p>\n

No.<\/p>\n

Not a chance.<\/p>\n

It\u2019s wishful thinking and some buyers might\u00a0want<\/em> desperately to believe it, but those folks fall into a certain bucket along with this fellow\u2026<\/p>\n

\"\"<\/p>\n

Is that what the seller and the listing agent are counting on?<\/p>\n

Maybe in 2021, but even then, the market was driven by\u00a0demand<\/em>.\u00a0 There were scores of buyers, tons of demand, limited supply, and with the condominium market falling into true \u201cseller\u2019s market\u201d territory, it was easy to list a property at an artificially low price, set an offer date, and use natural leverage to push prices up.<\/p>\n

But\u00a0today<\/em>?<\/p>\n

The mere concept of an offer date doesn\u2019t make any sense in this condo market unless you\u2019ve got a rare brick-and-beam loft or something that is in limited supply but has a tremendous number of potential buyers.<\/p>\n

Taking this one step further and considering an offer date \u201cstrategy\u201d\u00a0after<\/em> the property has already been listed at a higher price makes absolutely no sense.<\/p>\n

Here\u2019s another one that puzzles me:<\/p>\n

\"\"<\/p>\n

Nice condo, don\u2019t get me wrong.<\/p>\n

But the \u201cstrategy\u201d here isn\u2019t going to bear fruit.<\/p>\n

This condo is listed for $799,888\u00a0with an offer date<\/em>.<\/p>\n

And not with your typical offer date that\u2019s 6, 7, or 8 days after the property is listed.\u00a0 This offer date is a full fifteen days out!<\/p>\n

I suppose that\u2019s because an offering this rare, exceptional, and sought-after needs to be exposed to the market, right?<\/p>\n

Have a look:<\/p>\n

\"\"<\/p>\n

I wonder\u00a0how<\/em> motivated the seller is.\u00a0 Don\u2019t you?<\/p>\n

The problem is: this condo was\u00a0just<\/em> listed for sale for $949,990!<\/p>\n

And\u00a0now<\/em> there\u2019s a new listing with an offer date?<\/p>\n

Hmmm\u2026<\/p>\n

\"\"<\/p>\n

It doesn\u2019t make any sense.<\/p>\n

I\u2019m not trying to be mean-spirited or unsympathetic, so please don\u2019t get me wrong here.\u00a0 And I\u2019m hardly on the outside looking in, since I have\u00a0nine<\/em> current condominium listings and as I wrote all through 2024 on this blog, I purchased\u00a0two\u00a0<\/em>condos myself last year, with the feeling that we\u2019re in a market trough and the long-term outlook is very different from what we\u2019re seeing today.<\/p>\n

But that word \u2013\u00a0today<\/em>, needs to be understood.<\/p>\n

If you\u2019re a condo seller and you can\u2019t or won\u2019t keep the unit for 6-8 months, or a year, and you can\u2019t or won\u2019t put a tenant in there, then you have to be realistic about the market.<\/p>\n

These are very tough conversations to have, by the way.\u00a0 And agents like myself are having them daily.<\/p>\n

But being\u00a0realistic<\/em> about the condominium market is the very first step towards sucesss, and many agents refuse to have those conversations with their seller-clients.<\/p>\n

The result?<\/p>\n

Something like this:<\/p>\n

\"\"<\/p>\n

Beautiful condominium!<\/p>\n

Absolutely nothing wrong with the unit.<\/p>\n

However, the problem exists with respect to the price<\/em> and the listing strategy.<\/p>\n

Here are the remarks:<\/p>\n

\"\"<\/p>\n

So we have an offer date!<\/p>\n

Not only that, we have an agent that\u00a0insists<\/em> on being present for showings, which is a terrible idea since buyers hate that.\u00a0 Any time a seller-client of mine suggests that I be present for all showings, I always ask them, \u201cIf you were trying on a swimsuit in a store change room, would you be alright if the store\u2019s employee insisted they join you?\u201d<\/p>\n

Nevertheless, this condo, which is listed for $1,199,000\u00a0with an offer date<\/em>, was just terminated at $1,488,000.<\/p>\n

Yes, the seller and listing agent believe that the \u201cstrategy\u201d of under-listing by $300,000 and setting an \u201coffer date\u201d will help to convince the buyer pool the offering is too good to be true, have them flock to the condo in droves, submit bids, then get carried away and bid up a storm!<\/p>\n

Only, that ship has sailed.<\/p>\n

A long, long time ago, as the listing history shows\u2026<\/p>\n

\"\"<\/p>\n

Wow.<\/p>\n

If only I could find the words to describe this situation.<\/p>\n

Let\u2019s see\u2026..I\u2019m a cynic and from time to time I can be quite childish.<\/p>\n

I\u2019m also a 44-year-old dad with one eye in the rear-view mirror at all times, so put that all together, and instead of telling you what I think about the above \u201clisting strategy,\u201d I think it might be funnier (for those of you that are my vintage) to let this Public Service Announcement from 1992 speak for me\u2026<\/p>\n

\u00a0<\/p>\n