It's happened. The market has stabilized. No more panic buying, no more insane bidding wars. The sales were down by 37.3 per cent in a year-over-year comparison. The inventory has increased, TREB reports 19,614 new listings in June 2017, a 15.9 per cent increase in comparison to June 2016. This was, however, a significantly lower increase when compared to the 48.9 per cent jump in new listings in May 2017, compared to May 2016.
The average selling price in the GTA for all homes combined amounted to $793,915 in June. This represents a 6.3 per cent increase compared to last year. The most significant jump in the average price was in the condo segment. A buyer paid $519,784 for a condo in the GTA in June 2017, a 23.2 per cent more than he'd pay in the same month last year.
The dip in sales looks to be the result of buyers and sellers reacting to the Ontario's Fair HousingPlan, or rather they're deciding to wait and see what impact it will have on the market. In any case, it looks like the buyers will finally have some room to breathe and take more time to find a home that fits all of their criteria.
Here is what the Torontoism team has to say about the market situation:
July is here and so is the warm weather. With it comes the market report from the Toronto Real Estate Board. They are mostly focusing on the increase of listings and how that increase is affecting the market.
More product always has a tendency to slow the market but June 2017 is much slower than June 2016, however it is interesting to note that the prices are up statistically over last year.
That may be somewhat deceptive as the pricing is not up from last month but down, but also down from the highest bump in the last 12 months. We had incredible increases that lasted until April but the trend is now moving down to lower prices and more choice, and panic buying has left the marketplace...
A second straight month of moderating sales and increased inventory has firmly put us back into a "balanced" market. This is a good thing for us all...not too hot, not too cold, but just right. Buyers can see more options before making an offer on their ideal home. Sellers can benefit from making their homes "show" well along with realistic asking prices. Agents can utilize their expertise in marketing and negotiation to make a fair deal for all involved.
Buyers need to know that this is this is the time to find the right home and the right price. Sellers need to be patient and make their property shine. Agents need to price listings a fair market value. A win-win-win situation, welcome back to BALANCE.
An optimal time for Buyers is now. Many of those buyers that have been outbid over the last year have been taking advantage of the increase in inventory. Whilst some Buyers are sitting on the sidelines there are still those taking full opportunity of product that has been on the market for longer than usual. How long this will last is not known. I say "Seize the day".
The market has spoken and we hope the buyers are listening!! These are uncertain times with rates rising, sales activity slowing down and prices dropping.
It will be a 'Catch 22' for most buyers as they time their purchase before the expiry of their pre-approval issued in the last month or so. The shelf life of most approvals is 120 days so not much time to act if you want to sit around and see how much further pricing will adjust before you make the move. It is the best of times, it is the worst of times!!
Finally, we see normal real estate practice back in the marketplace. Buyers can take the time to do the inspection and get a firm approval from the bank. Their real estate agent can actually negotiate a deal for them rather than just playing a game of numbers.
Unemployment dropped to 6.5 per cent nationwide, while employment (mostly part-time positions) swelled by 45,400 positions in June. On a year-over-year basis, employment rose by 351,000 jobs (1.9 per cent), most of which was full-time employment.
The market fundamentals in Toronto are still really strong. We have lots of demand, lots of immigration and the interest rates are still low. Toronto is a great city to live in. All those things will start to take hold again, probably sooner than most buyers will wake up.
If you're looking to sell or buy, do not hesitate to contact us.
We are prepared to work hard making sure that your needs are met and that the result is more than you were hoping for. Nothing gives us more pleasure than your success and being with you through major life changes.