Understanding today’s market: Enjoy summer and make plans for fall
For many, summer brings a slower rhythm, pushing aside the hustle of other seasons, permitting us to enjoy the good weather and take some time off to relax and recharge. While the real estate market in Toronto never really hits the pause button, changing market dynamics mean buyers and sellers are adjusting to a less frenetic pace.
While overall sales have been much lower, the year-over-year average home prices are still up, with the average cost of a detached home in the Toronto area up 2.4 per cent to $1,737, 012 and the average price of a semi-detached home up 5.9 per cent to $1,343,378. Condominiums performed even better, with the average price up 7.4 per cent to $771,267 and townhomes selling for 9.1 per cent higher at $1,027,050 compared to last year.
With fewer buyers in the market right now and less inventory, it has created more balance in the market, resulting in a more moderate annual pace of price growth.
Clients often ask if they should list during the summer months or wait until fall. If you don’t have to sell right now, it is generally better to wait for the September market, when there will be more active buyers as people return from summer vacation and a greater focus on serious house hunting. I believe we can expect current market conditions to remain in place during July and August.
Adjusting to a more stable market
Right now, we often see a gap between what sellers expect to get for their homes and what buyers are willing to pay. This is to be expected as the market adjusts to the rising cost of borrowing and general uncertainty about the economy. Some sellers may be looking at comparable sales that occurred during the height of the market and having an expectation of listing for those same prices now. However, we advise that they look at what their property could have sold for a year or 18 months ago as a more realistic range. Once home prices stabilize, some buyers will re-enter the market despite the higher borrowing costs, as they will be more confident, especially first-time buyers.
There is certainly less activity now than at the top of the market, but the current conditions are a welcome and positive outcome. This period is creating opportunities for people looking to buy their next home, enabling them to take some time to make a final decision and creating room to negotiate, compared to when the market was heated and buyers were paying a premium.
What will remain true about Toronto, no matter the current market conditions, people are always seeking real estate investment opportunities here. Despite higher borrowing costs, housing demand will remain strong over the long term. Toronto continues to grow because the area attracts people and businesses from all around the world. Whether they choose to buy or rent, there will continue to be demand for desirable homes in good neighbourhoods.
If you want to discuss the current opportunities in the market, reach out to our team. We would be happy to have a conversation with you.
As proven experts in Toronto Real Estate, we can ensure the successful sale of your home regardless of interest rate changes. Contact us.