05 July 2022 ~ 0 Comments

Real Estate Market Watch

Let me start off with saying, no, the sky isn’t falling down on real estate values in Toronto. My very simple statement of course doesn’t fully take into account the complexities that are happening across the GTA when it comes to real estate.

You’ve may have heard that when it comes to real estate activity and home values, that real estate is locale in nature. Well, I like to take it a step further and say it’s hyper-locale and this spans not only neighbourhood by neighbourhood, but housing type, price, and location within that neighbourhood. 

For example, houses of all types that are situated in good pockets of the city, that are well maintained, priced well for the current market expectation, are still selling. Last month alone we had 1235 of them, and a similar amount of condos, sell as well. 

Yes activity is down, and there will be some turbulence as buyers adjust to higher borrowing costs, temperamental seller expectations (not all, but some) and the main stream media whose focus is on sensationalization of information, because thats what sells, it’s become more challenging to get a buyer past these hurdles and in a contract to purchase. But this is nothing new. We’ve been hear before and I’ve been through it countless times over the past 26 years. 

Managing expectations is crucial in the current market as both Sellers and Buyers are dealing with higher levels of stress (for a long time it was only Buyers who had to contend with this) and taking a big picture view will help you stay focussed on your “why”.

Why do you want or need to move? Let’s start there. And then, let’s go through the steps that we will need to navigate through to get you into that new home, or with the sale of your current one. 

Real estate values are still up over 5% when compared on a year-to-year basis. Yes, they have cooled off from the rapid and rabid in my opinion pace they were on, November 2021 thru early March 2022. And my hope is that they continue to come down in the short term. There were 6,474 sales total across the GTA. Total days on market are up on average to 24 from 17, but this is expected as Sellers and agents work through the shift in market sentiment. 

We buy real estate for the long term, and the focus needs to go back to how housing plays a part in our lives. Long term, you won’t find many who can dispute that the value has gone up and will continue to go up over time. But a house is not a stock. It’s a home. A place of stability, community, hopes, dreams. memories etc. You get the point. 

There are always situations where for various reasons, and there are numerous reasons why  you may have heard fo someone losing money on the purchase of their home. Too many for me to cover here, but the main ones such as divorce or job loss, are most common and more the exceptions and not the norm. I read recently that even during the market crash in prices of the late 1980’s/early 90’s the default rate on housing was 0.65% (roughly 2/3rd’s of 1%) on all mortgaged property. Which can vary but currently sits somewhere between 50%-54%.

Inflation is a major concern, there is a war going on which affects everyone, Covid is still kicking around, and there is mass confusion from experts if a recession is coming or not, or are we in one currently? All this and still values are holding up with close to 6500 sales and 5% year over price increases. The sky isn’t falling, we are just going through a crappy weather situation where we need to adjust our expectations on values when it comes to real estate.

There are many factors pointing to long term price escalation in Toronto. Affordability needs to be managed (if possible?) but looking at why you choose to live, work and maybe raise your family here is something that no longer is a secret. Demand is high throughout Canada and it’s major cities. 

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