Jeff Steinman had heard it before — the buyer loved his condo but wasn’t in a rush to purchase. It was the fourth showing for his modern one-bedroom apartment in the heart of downtown Toronto since listing the property in April.
Even after dropping the price by $50,000, Steinman has received zero offers, highly unusual for an apartment on Charlotte Street, close to Spadina Avenue and Adelaide Street West, especially in a 13-storey boutique building close to theatres, TIFF Bell Lightbox, sports stadiums, and multiple transit lines.
“Everyone that’s seen the apartment can’t say enough about how beautiful the place is,” said Steinman, who’s done everything he can to make it stand out, from lowering the price to printing signs and advertising in dozens of real estate groups on social media. “I’m frustrated and confused about why it hasn’t sold.”
Steinman’s home is one of the more than 6,000 Toronto condo listings on the market, as owners struggle to sell in a climate where buyers are waiting for interest rates and prices to drop further than they have.
The Bank of Canada’s quarter percentage point key rate cut in June did little to pull buyers off the sidelines, and despite last month’s condo sales falling by a whopping 29 per cent year-over-year, prices only declined by 0.9 per cent in the city, according to data from the Toronto Regional Real Estate Board (TRREB). This has led to more inventory on the market, with 6,201 active condo listings in June giving buyers a bounty of options to choose from.
Nearly half of the condos on the market have been listed for 30 days or more — an increase from the typical 18 days — indicating that sellers aren’t meeting buyers’ expectations, experts say.
It’s a standoff that’s led the market to a standstill — one that experts say will continue until the Bank of Canada lowers the key interest rate further, as many sellers, like Steinman, say they can’t lower their prices any more without taking a big financial hit.
Others are in worse situations, as their mortgages are underwater — when the owner owes more to the lender than what the home is worth — and will have difficulty paying back their lender if their home price drops too much.
“It’s been very challenging for me to understand why the market is so slow,” said Steinman. “I’m doing everything in my power to advertise and sell it.”
A mountain of obstacles
In 2020, Steinman moved back to Toronto, after living in the U.S. for many years, and had been renting a unit in his current building for a year when an apartment went up for sale. He decided to buy the one-bedroom condo in August 2021 for $652,000.
“It (the apartment) was a decent deal for me pricewise, and I opted into a favourable five-year fixed rate,” Steinman said.
Able to work remotely, he would often rent out his unit on Airbnb while travelling to the U.S. to be close to his children. “Having the option to Airbnb was perfect, it helped cover the mortgage and then I could be near my family.”
But in December 2023, he lost his job in the tech industry and several months later his condo board declared short term rentals would no longer be allowed in the building. With no revenue stream to help cover his mortgage, Steinman decided it would be best to sell.
In April, Steinman and his realtor decided to list the property for $599,000, a deliberately low price to garner attention and attempt a bidding war.
“We had three showings and everyone who came loved it,” he said, “but weren’t ready to purchase.”
After one week, they raised the price to $689,900, but still no takers. Then, they lowered it to $684,900 and then again to $669,900, which was “very competitively priced,” Steinman added. But no more showings materialized.
“The market is extremely saturated, there are so many condos on the market,” he said. “You never get to the top of the MLS search list. It’s been so difficult for me to navigate. How do you make your property stand out?”
‘I can only drop the price so much’
Two other units are currently for sale in his building, which is “very unusual.” One of the units is for sale for $579,900 — putting pressure on Steinman to drop his price further. Both were listed in June.
“I have an undervalued unit in the building, which is hurting my chance to sell,” he said. “It’s all really unfair having these undervalued units and it’s unfair the amount of commission we have to pay a professional representative.”
Realizing he’d spend up to $20,000 in realtor commissions, he decided to cut ties with his realtor in June and advertise the property on his own. Already, he’s spent $2,000 on social media platforms and other sale sites, and spends a couple hours daily posting his listing in 40 Facebook groups.
Steinman then posted his unit on the website “For Sale By Owner” which now has a price of $639,900 — and can’t afford to drop it further. “I can only drop the price so much,” he added.
Ron Butler, a Toronto mortgage broker, said many sellers in the current market, especially those who bought in the last couple of years, will be on the hook to pay back their lender the full amount owed of the remaining mortgage plus any break penalty when the sale closes as well as real estate commissions and lawyer’s fees. So if there’s any shortfall, they have to make up the difference.
If they can’t, “they’re in trouble,” he added, and could potentially face bankruptcy
‘Buyers aren’t in a rush to buy’
Since the February 2022 price peak, average Toronto condo prices have fallen by around $60,000. Experts said most sellers would rather cancel listings than drop prices, hoping to cash in when buyers eventually return to the market.
“Sellers who made a purchase in the last few years really don’t want to sell at a loss,” said Jarrod Armstrong, a sales representative at Armstrong Team, who’s now having to deny sellers seeking his representation.
“Every day we get phone calls from people wanting to sell and in 23 years in the business I’ve never said no to a listing, other than (during) the 2008 financial crisis. We’re not taking listings because the market value is so far removed from the sellers’ expectations or needs.”
Over-leveraged sellers who bought at the height of the pandemic when interest rates were ultralow but prices were high have the most to lose financially, and are unwilling to drop prices significantly from what they purchased for just a few years ago. But as units languish on the market, inventory is rising, making the market even more competitive.
“Many sellers aren’t able to sell for what the current market is,” said Tim Syrianos, principal broker and owner of Re/Max Ultimate Realty.
“Sellers aren’t participating in the price adjustment that’s required and buyers aren’t in a rush to buy,” Syrianos added.
Many had hoped that June’s rate cut would bring in a flurry of activity — the Bank of Canada’s quarter-percentage-point drop in June was the first in four years — but buyers didn’t materialize. With one or two more rate cuts expected by the end of year, sellers are biding their time. Some, however, are running out of runway.
While Steinman is hopeful he will sell his unit within the year, he also feels helpless about the market conditions and economic factors that created a “ghost town” condo market.
“The cautious economic policies and lack of urgency to lower the prime interest rate further is a very pertinent reason as to why the issue exists,” he said, referring to the dearth of buyers in the market. “It puts sellers in a bad situation and we can’t control those factors, we just have to sit around and wait.”
At the end of the day, Steinman is thankful to be in a financially stable position and can wait until his condo sells but for someone else who isn’t as lucky, “they would have to default on their mortgage and maybe be forced to live out on the street because they have no other option,” he said.
“I’m sure many people are at risk of that happening.”
