It’s a ‘Cream of the Crop’ Market with Some Interesting Tid-bits to Note

The inventory we have spent decades waiting for to alleviate bidding wars has arrived ! And although bidding wars are still here for a small percentage of properties, we can’t help but wonder - why is that? Our guess is that there are still buyers who are competing for the Cream of the Crop. Whether it be that the specific property is priced attractively, or it's the ‘right’ property many buyers have been waiting for. We remember when we first got into real estate, we were told and taught about resale value and the importance of purchasing real estate that would ‘hold’ that value. This market is showing the importance of owning and buying the prime real estate. It holds its value well and still attracts multiple buyers and bidders. Despite the majority of the market’s activity, which is effectively slowing down.

We lost a few properties last month on behalf of buyers in multiple offer situations. Specific attractive properties that have remained in high demand. They sold for what we would consider ‘market value’. Nothing record-breaking. But the circumstances still called for competitive offers. Typically offers without conditions, the deposit ‘herewith’ and rounds of improvement to try to win the home.

We are finding that buyers are more conservative these days with their bids. With inventory increasing significantly this month, buyers now have options. And although the Cream of the Crop inventory is still demanding and commanding a level of competition, the majority of the market is experiencing the opposite. Price adjustments, longer days on the market to sell, or new marketing strategies (some that we have never seen before); the majority of the market is seemingly less predictable and more challenging to navigate.

Overall, we are seeing Sellers price-adjust and adapt according to the movement of the market. Last fall we reported that it seemed that the market had hit a ‘stalemate’. Sellers weren’t budging on their prices and Buyers weren’t buying. The market seemed to have stopped last fall.

This year there seems to be movement (although historically low transactions) likely due to the increase in inventory and options for buyers. Sellers are now more willing to negotiate knowing they aren’t the only offering and option. And buyers are willing to wait for the right house or the right price. Buyers are generally more discerning. It will be interesting to see how this affects prices in the coming months. Especially if we experience an interest rate increase to be announced in the next few days.

If the BOC does a rate increase, our guess is the market will halt for the year. If the BOC holds the rate, we might see few transactions continue.

Real Estate in Toronto seems to be changing monthly these days. Last month there was little inventory, this month inventory is up significantly. We will see what next month brings.

Stay tuned.

Any questions, feel free to reach out.