The market keeps ticking upward; patterns and trends from last month continue to deepen, with sales up 22% from this time last year, and active listings down 14.1%. The number of active listings has actually dropped quite a bit just in the last month – the August number was 11.2% lower than August 2018. Average price, unsurprisingly, keeps climbing. The September average sits at $843K, up 5.8% year-over-year.

 

But that isn’t just for detached homes that are increasing in price – all property types are getting more expensive, especially in the 416. Average prices this month in the 416 were:

 

$1.36M for detached homes

$1.07M for semis

$785K for towns

$637 for condos

 

The jump in the price of semis is particularly notable, showing the biggest increase of all the property types – it’s the first time we’ve seen them go this high, even at the height of the real estate spike a few years ago, and even in the hot spring market.

 

The fall market is all geared up

We definitely expected to see a busy fall market – it’s the norm as people get back in the swing of things after family vacations and a slower summer pace. The very low interest rates are giving the market even more of a push, and we expect to see things remain busy into the holiday season.

 

Things are super-competitive for buyers right now, and we’re seeing the results of that with our own clients. People are getting more aggressive with their offers and their approach to multiple offer situations. Recently we faced a situation where a property had 10+ offers, and then one high offer came in with a 15-minute deadline – a pretty serious pressure tactic, which is aggressive, but also risky because it has a high potential for turning off the seller. However, in this case, it worked for them because the offer was so high. You could call it an “extra-bully offer,” and in this market, I think we’ll be seeing more and more tactics like this.

 

There’s a risk of taking an approach like that – one that goes beyond losing the listing. Ifvthe appraisal doesn’t match the offer and is way above recent sales and comparable properties, the bank won’t appraise it at the purchase value, and the buyers will be on the hook for the shortfall between the appraised value and the purchase price.

 

It’s the responsibility of the agent to warn buyers in a situation like that – we try to ensure our clients don’t overpay, and coach them to avoid these kinds of scenarios. Of course, every situation is different, and the reality of the current market with its lack of inventory is that well-priced/well-maintained properties are going to get a lot of attention – and aggressive offers.

 

In fact, we just had an experience where one of our clients was looking to buy a place that definitely wasn’t ideal – it was a nice property, but the subway ran right underneath it, so there was a lot of noise and vibration. After losing out on a lot of bidding wars, our client figured he finally had a chance with this less-than-ideal property, but he was in for a surprise. The subway proximity didn’t detract buyers at all: there were 10 offers submitted on offer night, and he lost out on another property. I haven’t seen that kind of action since 2016 – market conditions have gotten eerily similar.

 

However, there is one key difference between then and now: we’re not seeing astronomical double-digit price increases year over year. Back then, we were seeing 10, 15, and even 20% jumps – these days things aren’t quite as dramatic. For the most part, people are keeping offers reasonable, and there are still opportunities in the market – not everything is selling like this.

 

We had a client looking at a detached house in Etobicoke recently that was listed at $1.45M. It didn’t sell immediately, and actually went a week later for $100K less than the listing price. That final price was a better indication of what the house is worth – the sellers had gone with the initial price because another house on the street had sold for that a few months before.

 

That’s why you want to have an educated agent in your corner, one who isn’t swayed by that one high-priced sale, but understands trends in the neighbourhood and looks at comparable properties on the market for a better indication of value. An informed agent will be able to differentiate between a trend and a one-off.

 

September’s hottest (and coolest) markets

The hottest ‘hoods in the city last month were E01 (Leslieville/Riverdale), W02 (High Park/Junction/Bloor West), and E03 (Playter Estates/Danforth). The coolest markets – those that had the lowest sale to sale to listing price – were Richmond Hill and C14 (Willowdale/North York/Bayview Village). There could be good opportunities in these areas were properties aren’t selling over asking – and in neighbourhoods in the outskirts of the 416 like Eringate Centennial in the West and Centennial Rouge in the east.

 

If you have any questions about neighbourhoods, market trends, investment options or anything else real estate related – let’s talk.