As I write this, we’re ten days into the 2018 fall real estate market. This is traditionally the second busiest time of the year, as Buyers and Sellers flock to move before the cold, dark days of winter. Here’s what we think will happen in Toronto this fall:
- It’ll be competitive, but not bananas. So far, we see a healthy market, with no buyer or seller desperation. While bidding wars are still happening, it’s not 15 or 20 people showing up at every offer and bidding the price up to well beyond what the comparable sales justify. We predict a comfortable fall for Buyers – but if you’re looking for a ‘deal’, you’ll need to move beyond the 416.
- Great houses in great locations will, as always, be popular. If you aren’t living in the perfect house in the perfect location (most of us are not), then marketing beyond MLS and staging will be critical to getting top dollar. The days when almost every house gets 100 showings and ten offers are over. (Pro tip: contact us – staging and marketing are what we do!)
- First-time Buyers will seize the opportunity to get into the market before another interest rate hike reduces their purchasing power. The Bank of Canada has signalled their intent to increase the benchmark interest rate from the current 1.5%, possibly as soon as October 24. That would be the third interest rate hike this year. Think it doesn’t matter? A 0.25% interest rate hike on an $800,000 mortgage equals $100 more in extra mortgage payments each month. Pro tip: if you’re even remotely thinking of buying a house or condo this fall, get pre-approved for a mortgage NOW and get locked in at current interest rates.
- Prices will increase, but not dramatically. We’ve seen a solid recovery in prices in the last 12 months, with the August statistics showing that detached house prices increased 4.8% and condos increased 8.3% in the 416. We expect prices to keep ticking upwards throughout the fall months.
- Condos will continue to be a hot commodity, especially those priced for first-time Buyers. In the spring of 2018, we saw some fierce bidding wars for condos under $500,000 and we expect to see more of the same this fall. Condos are the obvious choice for first-time buyers priced out of the house market and are an ideal option for the hands-off investor. If you’re looking to buy a condo this fall, make sure to have your financing in order and your lawyer on standby to review the status certificate before offer night. [Related: How to Win a Bidding War: Condo Edition]
- Sayonara Toronto. The trend of Sellers cashing out of the Toronto real estate market and moving outside of the city will continue. We’ve helped a lot of Sellers through this transition this year, and it’s easy to see why it’s a tempting option. If you bought your house for $600K 5 years ago and it’s now worth over a million dollars, that could mean living mortgage-free in a smaller community. We’ve helped people transition to smaller communities throughout Ontario and Canada’s east coast, Mexico and Costa Rica in just the last few months.
- The return of the investors. So investors never really went away, but we predict those who’ve been sitting on the sidelines will be re-energized by more stable prices, less competitive bidding wars and the potential of another interest rate hike. With so many sold-out pre-construction condo projects being cancelled this year, real estate investors are looking for a place to park their money. [Related: 12 Things You Probably Don’t Know About Investing in Real Estate ]
- The biggest winners this fall will be the move-up Buyers who are moving from a condo to a house. They’ll seize the opportunity of a very active condo market and more calm house market. Win/win. [Related: The Guide to Moving to your NEXT House]
Looking to buy or sell this fall? Get in touch!