If you’re noticing a lot of For Sale signs in your neighbourhood, you’re not alone. No matter how slow the market appears to be, there are always new homes hitting the market in the fall, and this month is no exception. However, it’s SOLD signs that are actual indicator of whether the market is getting busier.
You may not be keeping track the way I as a Realtor does, but not all of the ‘new’ listings are actually new. Many properties were for sale over the summer and, when the buyers didn’t materialize, some listings were terminated and then those home were re-listed. Pick almost any street with past listing inventory, homes were taken off the market in August and re-listed since the day after Labour Day.
Currently, there are slightly more than 10,000 residential properties up for sale in Toronto. (Ranging from $250,000 for a one bedroom condo at Jane and Finch to $34,918,778, for the penthouse at 1 Bloor Street West.) How many of those are new? It’s a tough stat to follow. Realtors are able to track the listing history of an individual property but the practice of re-listing makes it hard to analyze the statistics as a whole segment of the market.
What the numbers can tell us is that there is a lot of inventory available compared to the number of properties that are selling. In August, in the City Toronto (not GTA), 4,177 new listings were entered in the system which meant there were 8625 available properties for sale. There were only 1,718 properties sold meaning only 19.9% of the properties listed actually sold.
As you’ve probably heard, the other news is that the Bank of Canada lowered the key interest rate for the third time in a row. Will this have a major impact on the market? I don’t think it’ll be MAJOR but it’s a step in the right direction. It’s still not enough to bring investors back in droves, which was a large part of what was driving the large part of the condo market and in small part single-family homes. Every decrease helps though and once we start to see a level of stability with the rates, it will create more confidence in the market and that’s when we’ll see marked increase in sales.
Of course, any decrease will really help buyers that really needs to buy. It makes buying a home that much more affordable. For buyers who are stretching their budget, every dollar counts.
Quite honestly, my guess is that it’s too soon to say this is the new bottom of the market. I think it’s still wise to take more of a conservative approach and anticipate another rate decrease… or three. The only exception would be if you’re looking for a particular kind of property, and the opportunity presents itself, it’s a good time to make a move because that opportunity may never cross your path again.
Sellers are still holding firm to what they believe the value of their home is, but if they’re serious about selling, they may be more flexible on price if and when they get an offer. Right now, it’s still not uncommon to see some major negotiating happening.
Here's what I will predict for the next few months:
Many buyers will continue to take a wait and see attitude. They’re waiting for rates to go down further and it won’t be until rates are stable that we’ll see more activity in the market. Consumers will then accept that this is what the market is, rather than waiting to see what it will become.
It won’t be until interest rates are under 4% that we’ll see any level of excitement coming back into the market, if at all.
We’re going to continue to see a further uptick of listings hit the market. A lot of sellers are thinking they’ll get more money now that interest rates are a quarter point lower but, because there’s such a glut of product available, there’s possibly going to be downward pressure on prices since there is so much more product for buyers to choose from.
Toronto’s real estate market is constantly changing – if you’re curious about what’s happening in your neighbourhood, get in touch!
