‘Balanced market’ brings stability to the real estate landscape.
Luxury homes still moving quickly.
Despite a dip in sales over the last two months, market conditions in the Toronto area remained tight enough to push the average selling price to an all-time record in May.
According to the Toronto Regional Real Estate Board, Greater Toronto Area REALTORS reported 11,951 sales in May 2021 – more than double the result from May 2020, the second full month of the pandemic.
May 2021 sales were below the May 2016 record of 12,789 but remained well above the average May sales of 10,336 for 2010 through 2019 period. Often, May is the strongest sales month in any given year; however, 2021 results bucked this trend, with May sales below the 15,646 deals reported in March. The average selling price across all home types was up by 28.4 percent year-over-year, reaching a record $1,108,453.
“The market is shifting,” says Armin Yousefi with Sotheby’s International Realty Canada, “The market is turning into a more balanced market.”
“In general, when you’re looking at neighbourhoods where entry-level prices are between $500,000 and $1.2 million to $1.3 million, those properties are still super active because that is a more affordable price range and more people are looking to move out of their condos,” says Yousefi. “The outskirts of the Greater Toronto Area are active as well. What I am noticing is that any family house – whether it is a three-bedroom house in the city or a five-bedroom house in North Toronto, all the way to York Mills is selling right away and at a decent premium.”
In Toronto, Yousefi says the larger home luxury market is still moving rapidly. Prices are staying where they were four-to-six weeks ago, which he says has contributed to the more balanced market. “It is not healthy to have multiple offers on every single listing the minute after you list it. If you have got a home that is turnkey, regardless of the price, it’s getting activity, and it’s getting offers.”
Is it still a good time to sell?
While there is more inventory on the market, does that mean it is still a good time to sell? The answer is yes.
“There are some listings out there that just don’t end up selling for the premium that you would think they would sell for, and buyers have more to choose from,” says Yousefi. “I would say if you plan to either upgrade or downsize, it might be a good idea to find what you are looking for first before you sell because there are going to be more buying opportunities in general. If you are looking to get into the market as an investment, it is also a good time for the same reasons.”
What does it take to successfully sell a home?
While you may have enjoyed your home for 15 years or more and feel it is well-appointed, your style may not always appeal to prospective buyers. If you have old curtains or a 30-year-old chandelier, you may want to update certain décor elements to fit today’s trends. The best way to have a successful sale is to identify the target demographic for your home and position it with that buyer in mind, says Yousefi.
“If a buyer can assess how well the house has been maintained over the years, the rest is easy to modify, and smart buyers always look for well-maintained homes. They might not have the glamour of a new build, but they certainly have a lot of value to them.”
“If the sellers have been living in the home for 20 or more years, chances are they bought it as a young family and are now transitioning on to something else, and purchasers are going to be younger buyers. What was in style in the 1990s is not in style today – position your home accordingly,” he says. “Or if you are in a condo in an older luxury building, consider updating with some artwork that fits the space, adds character or add pieces that fit the style of the condo as opposed to going modern, sleek and white.”
Know the value of your home
Even if you are not looking to make a move right now, or if you have a plan to move in the next six months to a year, it is always good to have a sense of the true value of your home.
“We are always happy to provide a complimentary market evaluation,” says Yousefi. “We don’t always expect the client is going to list right away – it is common for clients to engage with us six months to a year before they decide to do anything. The longer you have been in your home, the more important it is to start early to figure out what needs to be done to have a successful process.”
The luxury pre-construction and resale condo market
For those interested in higher-end condominiums in Toronto, Yousefi says the pre-construction luxury condo market is doing relatively well and is influenced by how urban dwellers are looking at their post-pandemic future in the city.
“It is stable – it comes down to Torontonians believing in the future of the market. The prices are considerably above the average resale prices in the immediate neighbourhood,” he says. “The developer’s sale process may be more gradual, but these pre-construction projects are certainly being purchased.”
Yousefi also recommends considering the resale condo market because there are “incredible deals” to be had and “wonderful value” from some condo units in the resale market.
“Prices have already recovered to where they were pre-pandemic, and in some condo buildings, prices have increased to where they were before the pandemic. Overall, it is stable, and as much as the rental market has not recovered, there are lots of people realizing this is a good time to buy,” he says. “They are buying as an investment because they know there is value to the resale market. Considering how high pre-construction prices are, they know if they ride out the slower rental market, they will profit from these rental condo units down the road.”
The health of the downtown condo market will be tied somewhat to the return of office workers after COVID-19 restrictions are lifted. When it comes to whether employees will return to downtown offices and downtown living, Yousefi says the Toronto commercial real estate market has remained strong despite so many companies having empty office space during the pandemic.
Even if some companies end up giving up space, there is demand from others to take over. The vacancy rate of commercial office space is less than 10 percent across the GTA.
June will continue to be a balanced market, says Yousefi, making it a more appealing time for buyers to enter the market.
“There has to be a moment in time when the market eases up, and that is exactly what we’re going through right now. The summer months will create wonderful buying opportunities, and the fall is expected to be busy again, but the fall will be more balanced.”
Are you ready to make a real estate move? Contact our team today. We can help with all your Central Toronto buying and selling questions. Reach out to us here and we will get back to you shortly.