BUT, THEY’RE NOT SELLING FOR MORE.
Are you a Seller who’s recently posted their property for sale (in January)? Or perhaps this is your second, or third go at it… maybe you had it listed in the Fall (2022) and had no luck… right?
Or you’re a Buyer/Investor, who’s been looking since the New Year? Or perhaps you’ve been looking since the Fall (2022), weren’t sure about pulling the trigger, felt a bit weary as nothing was moving… so, naturally, you didn’t want to be the odd person out… in case the market had not yet bottomed… right?
And now? You, the Seller, and you, the Buyer/Investor, are back at it… but something feels different, doesn’t it? Forget about feels, it is different.
If you’ve been following the market since Jan 1, 2023, you likely noticed a slow start due to a massive lack of options (inventory). But, the last two weeks, it seems many properties, some of which may have sat for months last year, are now actually moving (selling). It’s true… they are!
On our end, we can confirm the same, properties are selling again.
However, the purpose of this post is not to push the common message, namely: “The market is heating up, SELL SELL SELL… BUY BUY BUY!” We’re strongly against fear mongering to fulfill a personal agenda.
No! Instead, we’d like to shed light on what’s actually happening, what changed and how this has impacted our market and consumer behavior.
Ready? Let’s get to it:
- 2022 saw a massive spike in Jan/Feb off of the heels of an already red, hot 2021, which is not sustainable.
- Coupled with inflation concerns, global issues, higher energy costs and various unknowns, the Bank of Canada had to intervene (arguably a little late to the party).
- The BoC policy rate went from 0.25% to 4.50% over the next 12 months. This meant higher cost of borrowing all around.
- In turn, this had a direct impact on the housing market as we saw sales – both volume & prices – take a huge hit (20-50% pending geography and the type of home).
- Historically, Spring and Fall markets are our strongest in Toronto and the GTA, but the Fall & Winter 2022 market saw a significant drop YR/YR.
- Because, Buyers were weary – and more importantly, they COULD NOT AFFORD the same mortgage anymore, not because they didn’t want to, but because of the higher rates, the BANKS SIMPLY WON’T APPROVE.
- Historically, Winter months (end of November/December) are the slowest months anyway. This was simply compounded by the Banks policies and raising rates.
- Come January, barely any inventory – like nothing! Very, very limited at best (certainly throughout Toronto proper).
- Compounded by the fact that again, historically, Jan/Feb generally aren’t great for inventory anyway – see our post (The 4 Seasons of Nature vs Real Estate in Toronto).
- So, early Jan/Feb saw a slow progression – but as we moved into mid-Jan, we saw a noticeable uptick in sales activity – more homes were actually selling!
- And this will likely be corroborated when the Jan 2023 numbers are released by TREB (Toronto Real Estate Board) early next week.
What was/is selling?
Well maintained/renovated/new build homes, in nice areas, well presented (i.e. not just put up for sale, but rather, decluttered, cleaned, painted, staged etc.), and most importantly – appropriately priced (i.e. not crazy Fall #s that hoped for Jan/Feb prices still) – those homes have sold … getting offers in as little as 0-7 days … feels like the good ol’ days, right?
What hasn’t sold?
Older homes/poorly renovated/crappy builds, not well presented, and most importantly – incorrectly priced with incorrect pricing strategies for this market … still sitting on the market … this is not like the good ol’ days … as back then, these homes would have ‘piggybacked’ off of their superior counterparts – mind you, undeservingly so, but that was the market then – we didn’t agree with it either!
So, what does this all mean?
Well, as the title suggests, YES, MORE PROPERTIES ARE SELLING …BUT, THEY’RE NOT SELLING FOR MORE.
How does this impact you, the Seller?
If your property presents well, you’re well priced for the market and relative to your true competition, you’ll sell, and fairly quickly at the moment, as there’s not very much inventory … at the very least, you’ll certainly see a massive uptick in showings & inquiries relative to the Fall/Winter months of 2022.
How does this impact you, the Buyer?
You may notice that you have a bit less time than you might have had a few months ago. Once a property hits the market, it may be wise to book a showing with your Agent as soon as possible. Certainly, if that property checks all (or most of) the boxes. But don’t worry, you don’t have to go crazy, regardless of the # of offers (in this case and at this particular time) you’re likely still going to get a great deal and have some negotiating power (i.e. conditions/dates/and even price).
How does this impact you, the Agent?
This is great, we can trade, we’re not just prepping homes for fun or showing homes to post on Instagram. But, please, our colleagues and industry leaders – DO NOT contribute to a frenzied market – more activity does not 100% equate to higher sales prices – not when our policy rate just jumped 0.25% to 4.50% – cost of borrowing has not changed – don’t push fear as this only hurts our industry and its common public perception of it. We now have the opportunity to guide our clients based on their unique needs & circumstances and help them leapfrog to their next chapter. Don’t contribute to a bs market where Buyers bid on everything under the sun only to drive up prices, Sellers have outrageous expectations, and we just push paper – instead, be the market expert, guide and consult and hold your client back when you full well know they’re making a mistake … short term gains are never worth it!
How does this impact you, the Market?
We should all be happier. Sellers can sell. Buyers can buy. Investors can invest. Realtors and industry professionals (Brokers, Lawyers, Contractors, Trades etc.) can trade and we can all contribute to a healthy market rebound for years to come – this isn’t just good for the Real Estate sector, but rather, for all related industries and those working in them.
Conclusion and our advice to you…
Well, it’s all above. Things are looking better, for sure, but it’s not a 180 here – don’t be fooled. If you stay true to your particulars, understand the market and don’t make rash decisions based on FOMO or fear mongering messaging – you’ll do right for yourself and the market (health) overall.
Consult with your Realtor and get bespoke advice tailored to meet YOUR NEEDS – this is a great time to take advantage of many fruitful opportunities! (Read: Market Crashes Are Opportunities In Disguise)
Thanks for reading! DM us if you have any questions ☺
Amir + Aleks