In stark contrast to the days when many Toronto area home sales involved fervent bidding wars, the region now sees more prospective buyers doing the complete opposite and underbidding at a level not seen in a decade.

According to a report published Monday by real estate agency Wahi, nearly all neighbourhoods in the GTA — a total of 93 per cent — are in what the firm calls underbidding territory as of November, with people offering sometimes six figures lower than the asking price.

This is a substantial increase from the month prior, when 81 per cent of communities could be considered overall underbid based on the difference between the median asking price and median sold price for a home. 

In total, Wahi found just 16 of 256 parts of the region surveyed were in overbidding territory, with one seeing homes selling around asking price.

The trend of underbidding is at a 10-year high in the GTA, Wahi says. Chart from Wahi.

The culprit, of course, is interest rates and the ridiculous cost of living overall in Ontario right now.

"The effects of higher interest rates are being felt in real estate markets across Southern Ontario. That said, with interest rates stabilizing, now
could be a great time to potentially purchase a home due to having a greater selection of properties for sale and potentially being able to cut a sharper deal than even just a few months ago," the report says.

The areas where this has been most noticeable seem to be the most expensive ones, such as in Oakville, where houses in the Eastlake, Southwest and Iroquois Ridge South areas are now being underbid by an average of $199,888, $149,000, and $109,000, respectively.

(Sold prices in these areas still manage to top a whopping $2.25, $2.35 and $1.45, respectively).

Chart from Wahi showing the most underbid parts of the GTA in November.

In rural Burlington, also a pricey place, buyers are now underbidding by around $148,000 on homes that end up going for an average of a whopping $2.85 million.

Rounding out the top 5 underbid areas is Kleinburg, underbid by an average of $119,000 last month, with a median sold price of $1.63 million.

"At these prices, there is a smaller pool of buyers who qualify for financing," Wahi notes.

On the flip side, the top neighbourhoods for overbidding were Broadview North and Birchcliff in Toronto, where homes are going for $1.28 million and $1.18 million, respectively, along with Buttonville in Markham (selling for $1.75 million), North Oakville (selling for $1.46 million) and Milliken Mills East in Toronto ($1.16 million).

Notably, overbidding is occurring generally to a lesser degree in dollar figures than with underbidding, ranging from just $36,411 over asking to $77,001 over asking in the worst areas, with the exception of Broadview North, where homes are getting overbid by an average of $181,000.

Chart from Wahi showing the most overbid parts of the GTA in November.

Wahi does note that in some situations, underbidding or overbidding does not reflect that a home is going for less than its worth, as sellers can sometimes list high in the hopes of getting more in a competitive market or list low to spark a bidding war.

But, this data is still serving as yet another indication of how bad this year has been for a usually extremely lucrative, overblown and bustling market.

Buyers are now not only offering less than asking, leading sellers desperate to get out of a steep mortgage to let go of their homes for less than planned, but homes are sitting on the market longer amid diminishing sales transactions.

More and more listings are also being terminated when no one bites, or even being put to power of sale when owners default on payments.

In the condo market, the current economy is putting dozens of major projects on hold and actually causing stubbornly high prices to budge for once, yet not nearly as much as the current landscape demands.