The tides are changing
Just as we suspected, the market has started to shift.
In the first quarter of the year, tension in the market was palpable. Buyers were desperate for housing and sellers were firmly in control. Homes that we would normally expect to garner less attention were receiving tons of offers and sale prices were far exceeding the expectations of even the most market savvy realtors.
But at the end of March, we started to feel the first signs of a shift. Homes were sitting on the market a bit longer. Offer nights saw fewer interested buyers. Were these the early signs of things to come?
During periods of change like this, it’s important to be extra thoughtful about the information we share. It’s not enough to share the year-over-year change in average price. We have to take it one step further and also examine the month-over-month change. Using these numbers in conjunction with each other will give us a clearer picture of what the market is doing right now.
The average price of a home in the GTA currently sits at $1,299,894*. Not too shabby. A whopping 18.5% higher than last March’s average of $1,097,351. But, 2.6% lower than February’s average of $1,334,328.
So, what happened? A few things.
March saw a flurry of new listings. After the incredible price jumps we saw at the beginning of the year, it was inevitable that some sellers previously on the fence about moving would decide to take the plunge. This extra inventory gave buyers more to choose from and drove up competition among sellers.
In addition to this, interest rates rose. Limiting buying power and in turn, causing buyers to pull back.
The final factor? Good ol’ fashion buyer fatigue. After months of soaring prices and offer nights ending in heartache buyers needed a break. Talk about your perfect storm!
With pricing starting to level out again, we expect anyone who doesn’t NEED to move will hop back onto the fence and sit tight for a while. This will lead to another tightening in supply and eventually prices will start to rise again.
In the short term, there will be some great opportunities for buyers out there, but we’re confident that choice properties will continue to do well. Remember, if you’re a buyer looking for a deal, avoid homes with “fatal flaws”. That is to say, homes on busy streets, or backing onto train tracks or powerlines. When the market is hot, everything sells. But, in calmer markets these homes can be very difficult to sell.
*As per TREB stats March 2022
Let’s talk blind bidding
In the last week or so, blind bidding seems to be the only thing anyone is talking about. Housing prices are on everyone’s mind and with an election coming up, the powers that be want to look like they’re doing something about affordability.
But will it help? We’re not so sure.
For one thing, a ban on blind bidding will come into effect April 1, 2023. Bad news for anyone looking to buy this year. Secondly, sellers need to opt in. Why would any seller decide to do this when it’s not in their best interest?
Seems like much to do about nothing to us.
But, this probably isn’t the last we’ve heard about it. With the election fast approaching, all sorts of promises are being made. Including an increase to the foreign buyer tax from 15-20%. What we learned in 2017 was that foreign buyers are not the problem; And anyone willing to pay 15% probably won’t flinch at 20%.
Want to keep the conversation going? Let’s talk. We’re always happy to meet up for a coffee and a chat.