December 2016/January 2017

By January 31, 2017

Happy New Year!  It’s been a month since New Year’s Eve and those resolutions we made. How are you making out with yours? I hope we’re all still on course for a great 2017.

In case you’re wondering what the foreseeable future holds for the Toronto real estate market – I can tell you. My prediction can be summed up in four words, “more of the same”. I don’t see any reason for things to change, unless President Trump manages to weaken the current economy as a result of policy changes.

Here are my thoughts for the year ahead:

  • It will not be unusual for homes to sell for $200,000 to $400,000 above list price.
  • You’ll see homes selling for $100,000 to $200,000 above comparable sale prices with no logical justification for the higher price.
  • Pre-emptive offers will be more and more common.
  • Houses that are essentially identical will sell for wildly different prices  – in the same week.
  • Lesser homes selling for higher prices than better homes located right across the street.
  • More foreign buyers purchasing for investment purposes (and their investments have done extremely well over the past few years).
  • Higher prices. Prices increased by an exceptional amount in 2016, so I don’t expect as big an increase in 2017, but there’s definitely enough demand to push prices upward.
  • Fewer homes will be listed in 2017 as homeowners stay put and renovate simply because there’s nothing to buy.

With the supply side of housing being so low, it is inconceivable that sales can outpace 2016. Unless a plethora of new listings come to market in the spring, year-over-year sales will decline, even though prices continue to increase. Prices may reach levels that exceed affordability, which may cause properties to remain on the market longer;  thereby increasing the supply. Over the longer term that might result in price stabilization.

I know this does  not sound promising for buyers. On the other hand, if you’re planning to be a seller, your timing is pretty good.

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