Welcome to a very chilly 2018!
The weather has cooled things down
With the record-breaking cold we’ve had lately, nobody has been venturing outside, including buyers. When it’s -22° out, the last thing people want to do is go look at homes. But it’s not unusual – a couple of years ago, we had a really cold February, and that month’s numbers were a lot like what we’re seeing now. It’s likely any significant activity will get pushed into next month.
The upside, is that buyers will be back on the hunt as temperatures rise. I think we will have a healthy spring market this year, particularly in traditionally high-demand 416 micro-markets. Last year at this time, we saw growth across the board. This year, while the suburbs are still dealing with high inventory levels and flat prices, core neighbourhoods are rebounding, with inventory levels that continue to shrink.
Resale condos are better value than pre-construction
Looking for a condo? My advice is to focus on resale. Unless you’re looking to be in a specific building or want to get in on a truly special project, the real value right now is in resale. According to UrbanNation, the average price for pre-construction units is just over $1,000 per square foot, while pre-sale is hovering around $850. Plus, you don’t have to wait forever to move in. Win-win!
High demand for mid-range homes
This year, I predict towns and anything in the $400-800K range will move quickly. And the new mortgage rules that took effect January 1 will add even more pressure to that price point, as the amounts of people that are qualified to buy are reduced.
Market conditions are healthy
While interest rates have crept up, they are still historically low. With low unemployment and political stability (especially compared to the US), the real estate market is turning around in many areas.
What happens in the US affects our markets
Trump’s presidency is causing a lot of controversy. The markets are doing well at the moment, but with the calls for impeachment and all the other background noise, things may not stay that way. If something big were to happen, it wouldn’t just impact Toronto real estate – it would affect world markets.
So far, however, the Trump presidency has actually been good for the Toronto real estate market. People are choosing Toronto over large US cities because they feel things are safer and more stable here.
The new reality: homes are taking longer to sell
In the 905, higher inventory levels and lower demand mean those areas will take longer to see growth. Sellers need to accept this, or start adjusting prices to speed sales. Average days on the market has jumped from 20 to 27, but that’s still relatively low. Remember, however, that the hot-demand neighbourhoods are skewing the average, and if you’re selling in a less sought-after area, your property is likely to stay on the market for several months.
Is there something you want to know about the Toronto housing market? Curious about the impact new Airbnb regulations are having on investors? Want to get insight on Toronto’s next hot neighbourhoods? Let’s talk.
