"Quieter” and “slower” are not words you would expect to hear in today’s Toronto housing market. But during our last couple of office meetings, many of our agents reported a slight change in the real estate market with more listings being posted and bidding wars had become less frequent. Part of that, some said, is chalked up to the influx of listings that normally come during the spring. Particularly in the past week alone.
Once the flowers come out, a lot more listings come out and combined with “buyer’s fatigue” for all those buyers who have been watching 'crazy bidding wars' over the last few months, might have finally triggered a "wait and see mood." I think some buyers are pulling back because they think the market might fall and they're still worried about a bubble so there's a lot of uncertainty on the buying end.
Let’s not panic, it is still a 'sellers market' out there and I don’t think prices are going to go down just yet but right now it seems like there is a little bit of a lull in the air. There are fewer showings when there have typically been more and there are not as many offers on offer night.
Is the GTA market poised for a more balanced market?
Toronto’s hot housing market showed early signs of cooling in late April after a surge of new listings hit the market since mid-March. I think part of that was driven by sellers worried that the new provincial changes announced April 20th were going to cool our market. Well they did slightly. Prices for freehold homes fell marginally compared to a month earlier. The provincial announcement has undoubtedly affected the seller and buyer psychology.
However, prices continued their sizzling gains compared with a year earlier, climbing another 25 per cent in April for all types of homes, according to sales data from the Toronto Real Estate Board. The average selling price for all home types hit a new record level of $920,791 in the Greater Toronto Area in April, up 24.5 per cent from the same month a year ago.
Is this a good time to buy?
A month ago, almost every house and condo that was listed on the market had an offer date and on their offer date they'd have between five and twenty offers. Now, though, there's lot less stress because there are not as many offers. I believe that will be short-lived and the market will bounce back in the months to come since there is a strong "mob mentality" in the real estate market. When buyers see other buyers step back, they step back; when prices jump up, they jump back in.
It’s time to sell!
I’ve been advising clients for a while now that whether you are a downsizer or relocating, NOW is the time to sell and capitalize on the market. However, if you’re a real estate investor, the combination of price gains and rent control could turn it into a poor investment.
Now with that said, expect more sellers to list their houses or condos and even if some buyers take to the sidelines in anticipation of lower prices and wait for a sell off to take hold, the demand for housing is still too high for that to have any huge impact on the market.
The best anticipated outcome; this could push us into a more balanced market. A double digit rate of appreciation in real estate is just not sustainable and anyone who does not think this is problematic clearly doesn't understand real estate economics.
Any questions about this blog post? I want to hear from you so leave your thoughts in the comment section below.
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