How’s the market doing?

As I read media articles, I can’t help but notice that information lags behind usually by a good month.

So from someone who eats, sleeps, and breathes real estate, here it is:

About 70% of properties listed in January actually sold in Toronto as well as the GTA. In February, GTA was at 75%, Toronto was at 73%. March: 65% of listings sold in Toronto and 58% in the GTA. April: 51% for Toronto and 40!!!% for the GTA.

The market has a beautiful way of balancing itself out.

A little bit of buyer exhaustion, sellers jumping on board to cash-out, move to a different area and upgrade, or downsize. More supply, less demand. So we are moving back into a more balanced territory. The Government announcement and Home Capital’s troubles have created temporary uncertainty. Many people who are selling have already bought as people were worried what they would be able to buy, but not concerned if they would be able to sell. This has created opportunities throughout the GTA to get some decent deals.

At the moment, in one of the best pockets of the GTA in Richmond Hill, 43 detached homes are for sale and maybe 10-15 will sell in May.

Where are prices headed?

News articles state that prices are still high and haven’t come down at all. There is less traffic, but prices are still high. Not true. Here is what I see every day in my numbers: In general, Prices are strong and high in the most desirable areas for properties that possess the following criteria: they have been extremely well taken care of, upgraded, and have a unique quality like ravine, privacy, walk/out basement etc. In other words, welcome back to the normal market where people make sound decisions. In the next news articles (maybe a month from now), I think they will mention that prices in certain areas have actually “returned to reality”.

What does this mean for me?

It depends on what your current real estate dealings look like.

If you’re not actively selling or buying, stay put. I think the GTA is going through and incredible transformation to mature into one of the most sought after metropolitan areas of the World. We are already one of the best cities to live according to many reports. We have decades to go to full maturity. In the long and steady run, Real Estate has, is and will always be a cornerstone of our society.

If you’re currently in the market to buy: look for opportunities. If you’re willing to do a little work, properties that aren’t in perfect shape will be on the back burner and likely sell last and for better prices. Go against the grain if you can.

If you’re currently in the market to sell: be proactive. That’s all I can say. Supply and demand conditions are simply not the same as they were up until the first week of March. Don’t wait for a miracle. Price your property ahead of your competition, make sure you fix up/clean up and pretty up your place before putting it on the market, and hire a true professional to navigate your transaction.

Foreign influence, really?

Well, that’s a tricky one. Here is what I’ve seen: the biggest foreign influence is coming from Mainland China. This has been happening for years though. It’s not a new phenomenon. Neither are most buyers who are labelled foreign are actually foreign. They are immigrants, students, and legitimate businesses wanting to invest and grow with the GTA. Their purchase should be just as respectable as any other immigrants’. The money is already here. Based on conversations with local Chinese realtors, not a massive percentage is truly just sending money over here to park it. However, the influx of Chinese buyers over the years has been concentrated. That has created excess demand in certain pockets (especially ones with good school districts). This demand travels. If price gets too high, investors will look for better opportunities. As an example, I’ve seen a migration pattern from Richmond HIll/Markham to Durham.

What does the future hold?

A more balanced market for the time being. A reasonable May and June. A quieter summer. Perhaps a stronger fall if inventory is absorbed a little more than where it stands today. Of course, only if consumer confidence returns and no other external factors push the market and its laissez faire out of the beautiful fight to always reach equilibrium.

Thanks for reading!

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