Dear Toronto Home Buyers,
This is what you've been asking for!
But don't wait too long...
Here is my latest Toronto real estate market update for April and the start of May 2017.
Today I’m in Sherwood Park, just to the north of Davisville Village. Last month saw homes in Davisville Village sell for an average of 15% over the list price. With the Ontario government introducing a smorgasbord of initiatives to cool the housing market, was this the last hurrah for bidding wars and underpriced listings?
Hi, I'm Rebecca Laing, Toronto Real Estate Broker.
Welcome to my latest Real Estate market update for the month of April, combined with a mini update on what’s happening so far in May. I’m mentioning what’s happening now because of the shifting trend in market activity, which is different than what we witnessed less than 4 weeks ago. April started the month carrying the incredible momentum from the first quarter this year. Demand was intense, and home sellers were finally beginning to list more homes for sale.
Then by about the middle of the month, my colleagues and I started seeing a diminished number of showings on listings, and bidding wars that were not as fierce. When it came to the offer date, there might be only 3 or 4 offers when previously there might have been 10 or more competing buyers. There was a slight sense of hesitation forming amongst buyers, and the Ontario government hadn’t yet made any announcements on their plans to cool the market.
The government announcement itself came on April 20th, and while none of the actions themselves were shocking, what is a bit surprising is that they are proposing to take so many actions at once. In response, the market seems to have continued on the same slowing path as just before the announcement. There are still listings that are being underpriced with the intention of attracting multiple offers and selling for significantly above asking.
In several Toronto neighbourhoods, the best and most appealing listings are still finding success following this low-pricing marketing approach. In fact, homes in TREB district C10, which includes Davisville Village, sold for an overall average of 115% of the list price. Midtown and East End Neighbourhoods like Davisville and Leslieville really helped pull the overall average up, where it sat at 111% for the sale-to-list price ratio. That said, many listings throughout the city that are underpriced are failing to sell on their offer dates, which is resulting in them being relisted at a price closer to what the sellers are willing to accept. There are also increasing numbers of sellers who are pricing closer to market value right from the start, and who are willing to look at offers at any time.
Let’s take a look at the statistics and see what sales prices actually resulted.
In the city of Toronto, the average sale price for detached homes this April was $1,578,542, which is a 25.2% increase over last year. The average sale price for semi- detached homes was $1,104,047, up 22.4% over last year. The average for condo townhouses was $793,129 up 29.7% over last year. And Condo apartments were at an average of $578,280 which is a gain of 32.3%.
So as you can see, average prices are still increasing significantly over last year. They’re also up slightly over what they were in March, although the rate of increase is slowing. Two other stats to look at for insight on where the market might be heading is the number of new listings versus the number of sales. In the City of Toronto we had a total of 4164 sales, versus 7015 new listings. The supply of listings is finally catching up to the demand, and we are back to having more than a month’s worth of inventory. This is still very low inventory, but it is at least getting closer to being balanced with market demand.
This increased supply could be happening for a few reasons. First, there is a typical seasonal trend that brings out more listings at this time of year. Second, we had an abnormally reduced supply at the beginning of the year, so there may be a certain amount of catching up at play. Third, there is almost certainly a market response to the high price increases of earlier in the year…let’s call it sellers who are seeing the high sale prices, and are now taking the opportunity to cash-out. Finally, there may be a slight fear response amongst sellers who think the government action last month is going to slow down the market even more in coming months, so they want to divest themselves of their holdings now.
What does this mean for buyers and sellers who are thinking about becoming active in the market? If you are selling, it is imperative that your home presents at its best. This means getting those procrastinated maintenance items done, the house decluttered and staging appropriately. These are all items that I include in my services, so you don’t have to fret about doing these things yourself. The other crucial element for a successful sale is pricing realistically and marketing appropriately. Pricing the home at 30% less than what you really want combined with crooked cell phone photos is not going to get you a record-breaking price anymore. Again, get in touch with me to discuss a marketing plan geared to bring you success in this market.
Now, if you are a potential home buyer, here is an excellent opportunity to choose from a much greater selection of listings than in previous months. You may also get to avoid bidding wars, bully offers, and even potentially negotiate a fair price based off of a realistic listing price. As an added bonus, you are still able to enjoy the incredibly low interest rates that are still available. However, don’t assume that this window of opportunity will be long-lasting. In the past when the federal government has introduced new mortgage rules and other measures, any slowing in the market has been short-lived. Similarly, looking to Vancouver where their market cooling measures were introduced last summer, prices have now crept up to a new record high.
As always, I would be pleased to speak with you about how the market may relate to your specific buying or selling situation. You can call or text me at 416-357-1059, or connect with me through my website.
Thank you for watching, and have a great month of May. Until next time, I'm Rebecca Laing Toronto Real Estate Broker.