Today The Toronto Regional Real Estate Board or (TRREB) released the February 2020 market statistics and there is a lot more to this story than meets the eye or the numbers.
Simply put, if you have been contemplating selling your home, there has never been a better time to do that now. At the same time, it is also a great time to be a buyer too. Why?
Sellers: A Great Time to Sell!
Let’s start with why it is a great time to be a Seller. First, there is a serious lack of inventory (listings) on the Multiple Listing System (MLS) in the Greater Toronto Area compared to historical norms.
“Sales growth well in excess of listings growth is once again the norm.”
This means that we are back into a seller’s market with more and more prospective buyers competing for fewer listings. As a seller in this current marketplace, you are in a favourable position of demand outstripping supply.
Usually, as prices go up, more people decide to sell. But that is not the case here in the GTA. Unemployment is at historical lows, employment growth is robust and net migration to the GTA is at an all-time high.
“Demand is far outstripping supply and multiple offers are common on the limited supply,” says Jim Burtnick of SilverBurtnick & Associates at Sotheby’s International Realty Canada.
“My advice to Sellers would be “consider selling soon while all these factors are combining and currently working in your favour.”
Buyers: A Great Time to Buy!!
Why is it also a good time to be a Buyer? It might sound counter-intuitive that it could be both an opportune time to be a Seller and Buyer at the same time but here are some considerations below:
Today, the Bank of Canada just cut the overnight lending rate by 1/2 a per cent. This was done to combat the anticipated slow down in economic activity due to the coronavirus.
This, in turn, will cause mortgage rates to fall and mean higher borrowing qualifications for Buyers. We are therefore back into mortgage rates that are sub 3%. When you factor in inflation running at around 2%, that means the cost to borrow money is next to free. Why would you not want to borrow money now and on these terms?
As mentioned above, job growth, wage growth and net migration are also meaning that Buyers are able to enter or buy-up in this market.
All in all, we are in a unique period for both Sellers and Buyers to capitalize on residential real estate due to the confluence of all these factors. This is what the February stats are telling us when we read between the lines. Over the next months, you may hear “doom and gloom” reports from the News Media. Toronto was greatly affected by SARS but at the end of the day prices rose through it and the only real difference was fewer Buyers in the marketplace. Remember the old adage:
“Buy when no one is Buying and Sell when no one is selling”.
Silver Burtnick and Associates will be happy to “Make Your Home Dreams Reality”