GTA REALTORS reported 10,196 sales in May 2017. This number presents a drop by 20.3 per cent compared to the 12,790 sales reported in May 2016. Sales in the detached segment were down by 26.3 per cent and 6.4 percent in the condominium segment.
Good news for buyers – the number of active listings at the end of May 2017 was up by 42.9 compared to May 2016. Detached and semi-detached properties experienced a considerable increase in listings, while condos were down compared to May 2016.
The average price continued to grow in May 2016, reaching $863,910 – the average selling price for all home types combined. The increase in average prices was higher in the condo segment compared to low-rise home types.
The May TREB numbers truly show just how quickly a market can change. It doesn't take much to change the sentiment of both buyers and sellers. Just like the stock market, the perceived value of residential real estate is fluid and can go both up (like we have all seen for some time) and down (something we have not experienced since the USA subprime issue back in 2008). A classic example of Behavioural Economics at play. There is no real surprise that listing inventory is up - this happens every springtime.
The big change is that buyers are now not in a situation of competing for scarce inventory. Hence we are not seeing as many multiple offer situations as we did earlier in the year, that selling strategy is not as effective any longer. The real opportunity I see currently is for buyers. That is, they now have time to compare shop properties and make a well thought out decision on what to buy. Even better, they can negotiate a purchase price that is more likely to be less than the asking price and also have conditions such as financing approval within their offers.
However, I do think that the market activity will pick up (we are starting to see signs of this as I write this in the 1st week of June). So, like I said in my last comment, now is the best time to be a buyer in 2017. Buyers, don't wait too long as I expect activity to continue to pick up. The time is now to secure your new home. Sellers, you need patience and expect your property to take longer to sell and list it at a price with some room to negotiate (albeit this is just an adjustment back to a more "normalized" marketplace).
There seemed to be a bit of a shock to the market in early May but I too noticed a big pick up in the last couple of weeks. There is a June slowdown as we head to Toronto's Cottage season and a general fatigue of both buyers and their agents. Sellers need to be more realistic and flexible realizing that if their property is now worth 5 per cent less than a month ago, the context is within a 30 per cent increase last year.
Our favourite mortgage broker, David Smith at Oriana Financial sees the Toronto market as just catching up now to its International counterparts achieving levels Torontonians may be concerned about but more normal in the World stage. I have long thought that our Real Estate was undervalued and cheap in comparison to other leading cities...have we just been catching up??
Added supply and uncertainty have definitely slowed down the market. Buyers seem to be holding a big collected breath, waiting to see what happens before they make a move. However, this might just be the time to enter the market if you're looking to buy. The strong Sellers market has subsided and Buyers have more power and choice than compared to before. The notion of getting a property under list and with a condition or two seemed impossible but not recently. I have successfully negotiated for a number of my Buyer clients during the month of May and we have walked away with incredible deals.
There is a window of opportunity for buyers right now to buy without competition in many cases. I had buyers that had been looking since last Fall, and recently found a great property and we were the only offer much to their surprise but they leapt at the opportunity. Who knows how long this will last but it is a prime time for buyers for a change. However, there are still multiple offers on some properties. The last few weeks have been an education for Sellers and many listings have been re-listed on MLS for less or more which is also why the listings stats are up.