May 9, 2022
What a sudden and drastic change in the market since March, when the prices were rising like a fast-moving train that never seemed to stop, and which led us to suspect that rising prices would be the new normal!
Well, it just goes to show that there are no such things as always and never. The fast-moving train with no brakes seems to have suddenly found its brakes. The red-hot market appears to be finally cooling down. It’s like overnight the market suddenly shifted.
Viewings and multiple offers have dwindled, crazy prices are rarely being obtained, some homes are not selling on offer nights, some are not even getting any offers on offer nights. A good number of homes are starting to sell below the asking price.
There is a drop in the number of sales. There’s already a drop in prices because some potential buyers are taking the wait-and-see approach. The wait-and-see stance on the buyers’ part is increasing the supply of homes which will add to the pressure and push prices even lower. We are already seeing the supply increase significantly in the Don Mills area and I’m sure it’s the same in other parts of Toronto.
Were all the factors that were causing the frenzy, i.e., low interest rates, lack of supply, the pent-up-demand, etc., suddenly tossed aside by the Ukraine/ Russia situation? Was it the fact that the prices rose too high, and the buyers realized enough was enough? Could it be just temporary, and will it come roaring back again when and if the Ukraine/Russia situation is resolved? At the moment we have more questions than answers.
Homeowners that are considering selling in the present “suddenly changed” market, will have to learn to digest the fact that rising prices are no longer the new normal, and to price their homes based on today’s prices or hold back selling, at least for now, till the prices come back to the level acceptable to them. However, with talks of rates going up again, and with the inventory increasing at a fast pace, prices could continue to drop this year.
My advice for the sellers in this market, is to try and go for shorter closings and take as fat a deposit as you can. The “rule of thumb” may be 5%, but my rule is to do my utmost to get between 7.5 % to 10% deposit for my clients in this market. Because the climate has changed, so must our approach to buying and selling.
In my 34 years in the residential real estate business, I’ve seen all kinds of markets, and know very well the best ways to navigate through each of them.
If you are considering buying or selling in the near future, please feel free to contact me for a confidential chat at no obligation to you whatsoever. It will be a pleasure to share with you my years of knowledge and expertise in your neighborhood and in different market conditions.
Broker of Record / Owner