Desmond Brown

The Changing GTA Real Estate Market

02 June 2017
Desmond Brown

I was presenting an offer last week on one of my listings. The offer came in from an agent representing the buyer and it contained a clause I haven't seen in the Toronto real estate market for many years - a condition on the sale of the buyer's property.  

With our seller's market in Toronto over approximately the past nine years, the trend has been for buyers who own homes to buy first THEN sell their properties. This has been mostly due to the shortage of listing inventory and the fear that if people sold, they wouldn't be able to find another home.

People in almost every other market across North America, except Vancouver, thought this process of buying before selling was too risky, but this was the nature of Toronto's real estate market.

Conditions are changing in Toronto and our surrounding areas. With the number of listings on the market increasing rapidly, sales are down by as much 61% in Richmond Hill, 46% in Markham, and 44 % in Newmarket over the past month, as reported by the Toronto Star. In Toronto, sales are down by just 23%.  However the good news for sellers is that prices are holding steady.

As I mentioned last month, I welcome a more balanced market where buyers actually have a chance to fulfill their dream;  a first home, a family moving into something bigger, or downsizing.

This is not panic time for sellers. It's time for realtors to stop playing games by underpricing homes in hopes of creating bidding wars. Although we're still seeing some properties getting multiple offers and sale prices over asking, it hasn't been as common over the past two months.

We as agents must list houses closer to the market value, get back to old fashioned marketing and advise our sellers that it may take a bit longer for their properties to sell.  We must also tell them that when their properties do sell, it may sell for under asking, there may be conditions on financing and or a home inspection, and even the sale of the buyer's property.

Getting back to the offer we received at the beginning of this story, we did not accept it. Luckily, we had a competing offer that didn't have any conditions at all, so my client accepted that. However, even with the competing offers, the sale price was just shy of the asking price, not over. That in itself is a true sign the market has changed.

If you're buying or selling - or even simply thinking about it - give me a call. I'd be happy to sit down and discuss your options and the best approach to buying or selling based on the current and ever-changing market conditions.