As I write this, many of you are on vacation, much like the Toronto real estate market has been. While new listings are coming up daily, the volume is nowhere near what we experienced in the spring. If you’re not at the cottage or traveling, the timing is right to take advantage of this summer’s market. With fewer buyers and bidders to drive up the prices, it’s a good time to buy. With a little luck, you could be the only buyer to make an offer.
Sellers have recognized this shift in the market. They no longer price houses with the intention of inciting a bidding war, instead, they are listing with the intention of selling by securing a reasonable offer. In other words, expectations have changed for both sides of the market. Sellers don’t expect to see crazy numbers trumped up by multiple offers, and buyers don’t need to submit offers with inflated numbers. Buyers have plenty of choices and can sit back and wait before they take the plunge. For now, that is.
Here’s a good snapshot of how the market has changed from mid-March.
These numbers reflect a 20% drop in average sale price.
We have to bear in mind that these GTA numbers include the previously over-active areas including Markham, Thornhill, Pickering, Unionville, Richmond Hil, etc. These areas are experiencing a far greater slow down than the city of Toronto.
Despite the numbers above, the market continues to do well. From June 2016 to June 2017 the average price increased by 6%. That’s a good number to be at as we move into the fall.
Don’t be fooled by the recent news in the media that depicts a falling real estate market. It is simply not accurate. The growth that Toronto’s housing market underwent between 2016 and early 2017 was astronomical. To use this time frame for comparison purposes is deeply flawed; it distorts the reality that houses are still selling, albeit not at the stratospheric levels of 2016 and early 2017.
Whenever our government intervenes, the market experiences a blip. That’s exactly what’s happened. Frankly, I think it’s a good thing. The market was completely unsustainable and some added stability doesn’t hurt. I hope we get back to a less frenzied market where sellers and buyers can make informed decisions for a change.
Here’s what my crystal ball is calling for in the fall.
Once buyers are confident that prices aren’t going to plummet and that interest rates are stable, they’ll hop off the fence and jump into the market. This will drive prices up again, but not to the levels we saw a few months ago. Does this sound bullish? Maybe it does. But, if the real estate market is going south, why then, did Warren Buffet invest heavily in Home Capital Group?
I’d love to talk more about this with you, contact me to set up a chat!
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