The Toronto real estate market has become difficult to understand, partly due to the confusing reports we are getting in the press which has become quite excited about the overall change in the marketplace since Ontario’s new rules were announced in March of this year. The average price of all homes in the GTA has dropped by $68,000 (from $916,000 to $848,000) over the last five months. Can you believe that? Property values went up by 30% in March alone and now has lost $12,500 in value every month since then. It’s no wonder that the media is having a field day! However, we must dig deeper to get the true picture.
There are different markets in different areas of the GTA but the reports that most people see in the media are general and cover the whole marketplace (or sometimes just some cherry picked “hot” sections). It’s like having a ‘one size fits all’ bathrobe that can fit a five foot tall person or six foot tall person. Yes, it will fit both people but neither will fit really well. That’s the problem with general statements about the GTA market.
So… is this a Buyer’s market or Seller’s market?
Last month (August, 2017) there were 6,357 homes sold and the listing inventory was approximately 16,500 listings or about 3 listings per sale. The rule of thumb is that when you have a balanced market there is one sale for every 4 to 6 listings. It’s balanced because buyers have a good selection of homes within their budget and they can negotiate reasonably with the sellers to come to a price that both parties are happy with. A sellers’ market is when there are less than four listings for every sale – buyers do not have much of a choice and bidding wars occur, as we experienced over the last few years. A buyers’ market is where there are more than six listings for every sale and the buyers have an advantage over the sellers and the better hand in negotiations.
As we enter the fall market, on average, there are three listings for every sale, so, in general, we are still in a sellers’ market. But let us be more specific.
Some areas of the city (Central Toronto) fit this general model. Other areas of the GTA (Richmond Hill or Newmarket) have 5 listings for every sale, or a balanced market. King City on the other hand has 10 listings for each sale, a buyers’ market. Condominium apartments are still affordable and have become a hot commodity, with 1 sale for every 2 listings – advantage to Sellers.
Every segment the GTA is experiencing different market conditions. Please note that I have not yet taken into account the various types of freehold homes; detached, semi-detached or town homes in each of these market areas, a difference that’s important to the strategy when buying or selling.
More than ever before, that’s the value an experienced realtor like myself brings to the table, having the necessary experience and information so you can make the right decision. Like all experienced realtors I have access to data for ALL parts of the GTA, and the so-called ‘neighbourhood specialist agent’ has become an anachronism. I have listed or sold homes in downtown Toronto, Etobicoke, North York, Scarborough, Vaughan, Mississauga, Brampton, Barrie and Oshawa – and communities in between.
If you are trying to figure out the market, or have a friend who is considering buying or selling, give me a call or complete the form below. I’ll be happy to show you what is really happening.