How to Navigate a Chilling GTA Housing Market
Summer is generally a quieter time of year for real estate sales.
But this summer seems slower than normal, said Jennifer Scaife, sales representative at the Desmond Brown real estate team. Buyers are waiting for lower prices and sellers are only moving if they have to, she said.
« It’s definitely a lot quieter…than you might expect, » she said.
The downfall really started in mid-April, Scaife said, when home prices began to drop within weeks, sending closed deals to the trash and prompting sellers and buyers to pause and reevaluate their deals. planes.
“Buyers, in particular, are just a lot more cautious now,” she said.
Home prices in the Toronto area have been falling for several months and year-over-year real estate sales are down 41%. With an oversized Bank of Canada rate hike around the corner, homeowners looking to sell might be wondering if they missed their moment.
John Pasalis, president of real estate brokerage Realosophy, said the latest home price and sales data came as no surprise.
The combination of high house prices and rapidly rising interest rates has pushed some people to sell quickly, especially if they’ve already purchased their next home, he said, driving prices down at a rapid pace. month to month.
But if you’re feeling the pressure, Royal LePage CEO Phil Soper said it’s important to see the big picture. Most sellers are also considering buying, he said. So if you sell your house a little cheaper than expected, you’ll probably buy your next house cheaper too.
“For most people, a correcting market is a good time to sell if they are moving sideways or moving higher,” he said.
But that doesn’t mean now is the time to proceed without caution.
With prices trending lower, Soper said conditional offers are becoming more common, and banks may require a second appraisal if your home has been on the market for a longer period.
In some cases, a second valuation a few weeks later can cause prices to drop sharply, Scaife said. This leaves more room for conflict in the sales process.
Even though the paperwork has been signed, people may back out of real estate deals or seek to renegotiate during this downturn, Soper said.
Now that the market is cooling and given the uncertainty, Pasalis said more people will be looking — and should be looking — to sign up and sell before they buy.
But don’t rush into a sale if it’s not the right time for you or your family. Scaife said this short-term correction is just that – a drop, a slowdown, but not a cliff.
After all, this is Toronto.
« Toronto is just the market that doesn’t take a hit, really, » Scaife said. While buyers and sellers may take this time to reassess, « they’re not frozen yet. »
Soper agrees with Scaife: prices can only go so low in a market like Toronto, where demand remains high. Interest rates are still relatively low by historical standards, he added, and he doubts they will reach previous highs.
“We are now in a much more stable part of the corrected market,” he said.
“Prices are falling rapidly compared to February, March. But they are stabilizing at a lower level because the demand is still there and inventory levels have not increased.
Plus, prices are always rising year on year, so unless you’re buying your home at the top of the market, it’s guaranteed to appreciate even over a few years, Pasalis said.
« It’s not like we’ve dropped to pre-pandemic levels, » he said.
It might take a while for prices to rebound, but Pasalis agrees Toronto’s lopsided and expensive market hasn’t fundamentally changed.
“There will be a floor” to this slowdown, he said.
The big challenge for many sellers will be giving up the price they were hoping to sell for, Pasalis said. If you really need to sell, waiting isn’t the best approach — swallow your disappointment, make your home stand out, and get the best possible price, he said. After all, even if you’ve only owned your home for three or four years, « you still made money. »
So despite the stress and uncertainty, the advice remains the same: if it’s the right time for you, then go ahead and sell.
« It’s been a crazy two and a half years and it’s a time when sober second thought is entirely reasonable, » Soper said.
« But the underlying strength of the real estate market, particularly in southern Ontario, hasn’t diminished one bit. »
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