Now that it’s almost the end of November, we’re seeing fewer homes coming to market; a trend that’s likely to continue through the holidays. My guess is that you can expect to see a flurry of new listings at the beginning of the year, which is all a part of the natural heartbeat of the real estate business.
That wasn’t the story in October, though. Home sales were up significantly compared to the same time in 2023. The number of single family homes sold was up by over 37%, and even the number of condos sold was up by over 32%. Interestingly, despite increased sales, prices remained fairly steady. If you want to see specific data, click here for the TRREB press release.
I think the numbers make sense. There is a plethora of inventory out there that has to be absorbed so, even with an increase in sales, there’s more supply than demand.
But does this make it a buyer’s market? Not quite. Homeowners who don’t have to sell aren’t budging significantly from their asking price. Is it a balanced market? Not quite. The decrease in interest rates is definitely getting more people committed to buying, but buyers still have power, and the story they tell when they’re bringing in an offer is that if it’s not your place we buy, it’s going to be somebody else’s.
With so many properties available, sellers have to understand that the power is less in their hands than it is in the buyers. They still have to price competitively and worry about all the other properties that are coming onto the market.
Here’s an example. In October, I listed a co-op on Gloucester. On the same day, the identical unit two floors down was listed, for $50,000 less.
I was confident my listing was priced fairly and we ultimately sold first. (Plumbed in ensuite laundry helped, the other unit didn’t have it!) Both sold within two weeks of being listed and a little under asking. Both were listed for realistic prices and that’s among the reasons they sold quickly. Properties that are listed too high are languishing.
What’s coming down the pipeline?
The majority of buyers and sellers are going to wait until spring. Buyers are counting on interest rates to go down and sellers are counting on more buyers with the idea that home prices go up.
If you’re a buyer, I actually think that waiting is potentially a mistake. Now is the time to get into the market because there is so much to choose from and the majority of sellers are willing to negotiate. There may very well be more homes and condos available in the spring, but there will also be more competition from other buyers. With the lowering interest rates more buyers inevitably will enter the market.
I doubt condo prices are going to soften in the spring. If you run the numbers (a good mortgage broker can do this for you), you would see that the difference in your monthly payment if you buy at today’s prices and today’s interest rate compared with spring prices and rates, the difference would be under $100 per month.
If you’re a seller who has to sell first before buying, I suggest sitting back, enjoy the upcoming holiday season and think about going to the market at the beginning of 2025… rates will be lower and many more buyers will have renewed interest after the holidays are over.
Also in the news, the Globe and Mail recently reported that the number of members of Toronto’s Real Estate Board (the licensing body) went down by about 8%. Don’t panic, we’re not quite an endangered species. There are still 73,000 licensed realtors, it’s just as one person put it, ‘a culling of the herd.’ People are retiring, and some who thought they could make some easy money found out it wasn’t quite so easy. When the market picks up, we may see another increase.
Although 73,000 is a big number, there are a lot of realtors who don’t sell any properties. In October, 6658 properties sold in the GTA. So clearly, the majority of realtors aren’t making money. It’s the 80/20 rule; 20% of the realtors do 80% of the work. Quite honestly, there are a lot of realtors who don’t sell any properties.
Bottom line: choose someone who does this full time! If you ever want to discuss the market or are curious about what your home is currently worth, please get in touch!