Wondering what is going on with the Toronto real estate market right now? You and everyone else. Buyers, sellers and those who are simply interested in how their property values are being affected.
Here is my take on what is going on.
There is no doubt a shift has occurred. When the government announced upcoming changes back in April I saw an immediate change in a new listing. While we still had lots of people through the open house, we had significantly fewer showings and only 2 offers on “offer day”. My seller still got a very good price for her home, but not what was originally anticipated based on a ridiculous price for a neighbouring home back in March. She received “market price”. The amount an educated consumer would pay for a property given a reasonable amount of time to make that decision.
A far cry from the craziness we saw in February and March. This was unsustainable with buyers lining up to pay hundreds of thousands of dollars over MARKET price – not only LISTED price. This was in large part due to the lack of inventory.
Flash to April. The Fair Housing plan, aimed at cooling the hot market, had been announced. Most realtors didn’t think these changes would have much impact since the target of the majority of rules would affect such a small group of the buying public (2.2%-2.6%). However, with buyers frustrated and sellers anxious we saw a pretty major re-balance as I’ll call it. Sellers scrambled to get their properties on the market and buyers said they’ll wait to see how things will go. Now we have an influx of homes available and buyers not buying.
However, keep this in mind – we typically see an adjustment in April and May. This is the Spring selling season after all and home owners prepare their home and wait for the better weather to put it on the market. So that in itself produces more inventory than in February and March. Add to this the additional urgency of buyers who bought first and still have to sell and we have 13.5% more homes on the market than April of last year!! (Toronto Real Estate Board)
SO WHAT DOES THIS MEAN TO YOU?
As a Buyer – There is a great opportunity right now. Lots of inventory to choose from and you will likely be in a position to NEGOTIATE … yes that word we haven’t used in a long while.
Capitalize on it – don’t assume it will last. Sellers who don’t really need to sell will soon take their homes off the market and we will have less supply again. This is cyclical. Vancouver’s slow down lasted barely 6 months then things got pretty much back to normal.
As a Seller – Not quite hub of activity it was a few short weeks ago, but keep in mind for the most part, prices remain higher than last Fall. Aside from those few homes that sold for, frankly, crazy amounts, you will still benefit from the price increases of February and March. I am not seeing many $899 homes that sell for $1.3m anymore. What I do see are those same homes properly priced at $1.05m-$1.08m.
It is important to have patience – Days on Market is no longer 7 days. We are getting back to 3 – 4 weeks on average. Higher priced homes even longer.
This also means that your home had better be in top shape and showing to perfection. Staging and marketing will play an ever increasing role in this market
My recommendation to those who are both Buyers and Sellers — This is the time to sell before buying – quite the change from the last few months when the fear of not having anywhere to live was prevalent if you sold first. There are more homes to choose from so don’t feel like you will miss out. There will be another one. That’s how buyers are feeling about your home right now. They are taking their time, determining exactly what they need and not settling.
As a realtor I offer my seller clients a couple of unique services to help them stand out. A few hours of HouseLife Services support – be it packing, decluttering, furniture reorganization – whatever it takes to help showcase the in its best light. I also cover the cost of a home inspection AND my handyman husband will take care of minor maintenance items that show up before the home hits the market.
And if you haven’t seen my latest video marketing have a look at these links. I advertise my listings to a very targeted group and get incredible views and responses on Facebook, Instagram and Realtor.ca.