Pricing a Condo in a Cooler Market: Strategies for Success

While Toronto’s overall real estate market is relatively healthy and balanced these days, the condo market is experiencing cooler conditions. Summer 2024 saw fewer condo sales, significantly more inventory and decreasing prices.  

While there’s a lot you can do to impact how fast your condo sells and for how much, if you’re serious about selling, you need to set the right asking price. Pricing a condo correctly is more important than ever. If you’re looking to sell your condo in the cooler market of fall 2024, consider the following strategies:

1. Understand Your Competition 

By their very nature, condos are more homogeneous than houses. When there’s a lot of condo inventory for sale, buyers can find multiple units with similar layouts, finishes and views – often even in the same building. That means your potential buyer isn’t just viewing your condo – they’ll likely visit all the similar units in your building and neighbourhood before making a decision. We call this your ‘competition’. It’s important to understand your competition before you set your list price, and continually monitor it while you’re listed. Your REALTOR should provide you with a list of the comparable condos competing with you and help you understand: 

• How do they compare to your condo with respect to size, layout, finishes, views, and amenities?
• How long have they been listed for sale? Have they been listed multiple times? It’s not uncommon for REALTORS to re-list properties to attract attention, so while a listing might indicate that a condo has been on the market for 24 days, it may have been previously listed. I saw a listing last week that has been struggling to sell for FIVE months – but the current listing shows 11 days on market. Make sure your REALTOR gives you ALL the data. 
• What pricing strategies have they used? 

A great REALTOR will visit your competition in person before listing, so they can understand how your condo compares. They’ll also continually monitor new competitors, sales, price changes and listings that get terminated. 

If a competitor sells before you, it’s important to know:

• How long it took to sell
• The pricing strategy used (for example – did the competitor set a low price in the hopes of attracting multiple offers?)
• How the sold price compares to the list price
• If the new sold price affects the current value of your condo
• If any incentives were offered and if they were effective

When new competing properties are listed for sale, you need to understand:

• How they compare to yours (finishes, views, layout, size, etc.)
• If their asking price impacts your pricing strategy – in other words, did they price above or below you?

2. Price Competitively

REALTORS use a few methods to determine the value of a condo. We wrote a detailed blog about it here. In Toronto, REALTORS:

• Determine the per-square-foot cost of recently sold comparable condos in your building/complex. If there aren’t any recent sales, we’ll look to sales in similar buildings in your neighbourhood. 
• Determine how your condo compares to the sold properties, adjusting our price/value recommendation to reflect differences in size, layout, finishes, views, height, outdoor space, parking, etc. 
• Consider market activity and data. If prices are declining, it’s important to price BELOW the last sale. If prices are increasing, you’ll want to price ABOVE the last sale. 

While it may be tempting to price aggressively, be mindful of the risks of overpricing in a cooler real estate market. When buyers have lots of condos to choose from and feel in control of the market, they are more price-sensitive and less willing to pay above market value. If you want to avoid sitting on the market unsold, work with your agent to set a realistic listing price and strategy that reflects the true value of your condo and positions it competitively in the market.

3. Highlight Unique Selling Points

Identify and highlight the unique selling points of your condo to differentiate it from competing properties and justify your asking price. Don’t just showcase the obvious features like location, size, finishes, layout and views. Consider:

• What makes your condo building superior to others in your neighbourhood? It might be unique shared amenities like a pool or dog grooming room, lower-than-average condo fees, energy efficiency, pet rules, Airbnb/short-term rental rules, a high percentage of owner-residents vs tenants, great visitor parking, etc. 
• What makes your condo unit superior to the competition? Do you have secret storage options or built-ins? Special sound-proofing? Have you renovated or updated the appliances or light fixtures? Do you have a unique layout or larger-than-usual balcony or terrace? 
• Why does your location stand out? Do you have easy access to TTC or highways? What nearby shops, services, restaurants, parks and schools might attract a buyer? 

Consider investing in professional staging to showcase your condo in the best possible light and attract buyer interest.

4. Offer Incentives

In a cooler condo real estate market, consider offering incentives to attract attention and sweeten the deal. There are lots of creative ways to incentivize buyers and their agents. Some of the more common incentives we see: 

• Out-of-the-ordinary inclusions: flat-screen TVs, wine fridges, barbecues, patio furniture, custom blinds, etc. 
• Offers to offset condo fees for a specific time period
• Higher buyer agent commissions to attract REALTOR interest
• Mortgage assumption options (if you still have a low interest rate)

5. Be Flexible

In a cooler market, flexibility is key to navigating the selling process and adapting to changing market conditions. 

• Be open to feedback from prospective buyers (even if it’s not what you want to hear). That might mean having to repaint a room or invest in professional staging
• Be ready to negotiate on inclusions, closing dates and conditions – a cooler market means the buyers are in control, so if you want to sell, you need to be ready to negotiate. 
• Be prepared to adjust your price and/or pricing strategy with market fluctuations. 
• Let your REALTOR experiment with different marketing campaigns and strategies, targeting various buyer groups. While you might picture a first-time buyer in your condo, depending on your property, your buyer might alternatively be an investor, downsizer or the parent of a student attending a nearby university.  
• If you’re buying and selling at the same time, be prepared with a Plan B if your condo doesn’t sell before the closing date of your new home. 

If nobody is booking a showing to see your condo or none of the showings are resulting in offers, the market is sending you a message. Listen!

In a cooler real estate market, it’s important to list your condo at the right price from the start, then monitor and adapt as necessary. Hire a REALTOR with proven success selling condos like yours in a market like this…their guidance will be essential.