Here it is, the summer is over and the city is cooling down. However, in Toronto real estate market the seasons seem to have switched their places: after a scorching hot spring, the summer has brought a cooldown to the delight of many homebuyers.
The sales dropped by 34.8 per cent compared to August 2016 and amounted 6,357. The average price reached 732, 292 and was still up by 3 per cent year-over-year but down from the April peak of $920,791. The number of new listings was at its lowest since 2010, it was down by 6.7 percent compared to August 2016 and amounted 11, 523. The active listings surged by 65.0 per cent year-over-year.
The dramatic drop in sales this summer left the real estate experts and reporters making guesses for the upcoming months. If we compare current sales to the spring levels, the prognosis is likely to be negative. But if we consider spring market to be unhealthy and overheated, the latest stats actually suggest a return to a more balanced marketplace, close to what we could observe before the spring frenzy came to the market.
Thought on the TREB Market Stats from the streets!
The number of sales is definitely down and there is a change in the market, however the issues that drove up prices last spring still stay in effect. There has only been a small increase of listings in the GTA in August and at the end of the day we are still 3% higher in pricing than last August.
Please remember that earlier alterations in the marketplace were also driven by a falling economy, job losses and very high interest rates. The economic outlook for Southern Ontario is strong so we don't see this change as more than a correction and rethinking of an overheated market. However when the market adjusts lower it is best to sell at the top of the downslope rather than waiting for more adjustment.
People have been scared by the change in the marketplace but be aware of the driving forces in the GTA and you will find that the long term prognosis is positive.
Sellers have to adjust expectations (you cannot price at what your neighbour received last April). Sellers who would be buyers must sell and take advantage of the buying opportunities. Buyers must realize that real estate has two functions: use and investment. Enjoy the property, home ownership and realize that prices in the GTA will seldom drop. Always buy the best property you can afford and you'll never overpay!
As expected, the summer months slipped back into its traditional mode as it relates to real estate. That is, buyers and sellers generally took the summer off to enjoy time with family and on vacation. This was not the case in the previous few summers when real estate activity never slowed down. So, although the sales were down by almost 35% this August compared to August 2016, what we saw was the real estate cycle simply going back to its traditional rhythms.
As I mentioned in my previous commentary, what we are experiencing is the real estate market moving back into a BALANCED mode. That means that Buyer, Sellers and Realtors (R) need to adjust to the way things work in a normalized and healthy market.
Remember those days? This is actually healthy for everybody concerned; Homeowners need not be worried about depreciated values/bubbles bursting, Buyers can take their time to find the right home, ensure that there are conditions in their offers for proper due diligence and Realtors (R) can do their job and negotiate a fair deal for all parties concerned.
Rest assured our Canadian and local economies are doing very, very well and this bodes well for real estate demand and therefore values. All looks good heading into the autumn. Here's to balance!
Do not be the highest bidder for your own home!
Sellers need to embrace change because the market is telling us something. We are in a time when conditions are starting to become acceptable on offers and a time when the infamous "bully offer" is dead. Buyers are exercising extreme caution and not jumping into the market as they were earlier this year. Having said this, the same buyers are willing to dip their toes back into the market provided the expectations of the sellers are not unrealistic.
Price your home right or leave the market, the choice is yours!
Whilst we are moving into a more balanced market it is definitely not a time to sit on the fence if you are a buyer.
The economic outlook is still a very healthy one. You will make money on the home you purchase going forward.
Buyers should not be completely fooled that the "multiple offer" scenarios are long gone. Over the last couple of weeks in August I saw bidding wars on well-priced and presented homes in strong areas.
Some of my buyers are cautious but anxious for the Fall market to get going. I am looking forward to the months ahead and securing some great properties for our clients that have been looking for a long period of time and were priced out of the market.
August had been quiet to me, but not for every agent in town. My fellow agent friends have been telling me they were surprised by how numbers of showings increased during the month of August. Listings were down from previous month.
I think it is simple math for sellers and buyers. When the supply is down, demand goes up, and so does the price. Now we have about 2.6 month inventory for sale, still the lowest across Canada. It is unbelievable market over here in Toronto. i think the market recovered well in august, after all the changes we had going on.