Toronto's real estate market can be daunting at the best of times but its pace is simply a matter of supply and demand. Right now, there is very little supply so the ‘bid war frenzy’ is often happening. In situations such as this, buyers need to ask the right questions of their realtor…in particular, they need to know the proper pricing of the homes they are interested in. Since most listings where offers are accepted at a set date are “underlisted” at a price far less than their market value to attract attention, this will help them focus on areas and homes that are truly within their budget price range.
That said, buyers also need to listen to the advice of their agents if they tell them a property is beyond their budget (a very difficult thing to accept if the buyer has fallen in love with a listing). Unless it is your ‘absolute-forever-I-will-die-there’ dream home, buyers need to be sure the home will be affordable in the long-run.
Sellers also need to ask the right questions of their realtor as many have been out of the market for a long time and are not aware the current market value of their home. That way, they won’t run the risk of “overlisting” their home and having it sit on the market an overly long time.
At the end of it all, a home is only worth what people will pay for it. The appearance of prices being driven drastically up only happens so long as there are buyers willing to pay well above and beyond what is currently considered a fair-market value.