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The spring real estate market is historically one of the busiest periods in Toronto. Here’s what you need to know if you’re thinking of buying or selling a home this year:
What’s the “Spring Real Estate Market”? When Does it Happen in Toronto?
The “spring real estate market” is the term we use to describe the start of the busy real estate period that happens at some point between Christmas and summer. Ironically, in Toronto, the spring market has nothing to do with what season we’re actually in or what’s going on with the weather; some years, the market comes back to life in January, and some years it arrives in April. Based on what we’re seeing, I think it’s fair to say that Toronto’s 2023 spring real estate market arrived at the same time as the kids headed out on March break. It’s here right now. Hellooooo, spring market! We’ve been waiting for you.
Buyers vs Sellers: The Imbalance That Drives the Market
Toronto’s buyers and sellers rarely join the spring market at the same time – the buyers are almost always ready before the sellers, who are usually waiting to list their homes when the weather is better. This imbalance is one of the reasons we see the fiercest bidding wars and new benchmark prices at the beginning of the spring market – there are just too many buyers competing on a limited selection of homes. True to tradition – even in a nervous market – we’re seeing this happen again this year. This past week, 54% of the houses sold in Toronto sold ABOVE the asking price – and the average house sold at 104% of the list price. It’s the same story with condos – almost 50% sold above the list price, with the average condo selling at 102% of the asking price. Surprised? That’s what happens when inventory levels are low and buyers and sellers exit winter hibernation at different times
Timing the Market: Why It’s Almost Impossible to Do (And What You Can Do Instead)
There’s no guarantee about how long the spring market will last – sometimes it lasts just a few months, and sometimes it’s strong through to July. Our typical seasonal cycles were bungled by lockdowns during the pandemic, making it even harder to predict how long the spring market will last this year – and it only gets more confusing when you try to account for how our unstable economic conditions will impact market activity. Every year, I see sellers who wait too long to list their homes for sale and miss the busy market, and I see buyers rush to buy a ‘compromise house’ at the height of the market and miss out on better opportunities a few months later.
This is my 15th spring real estate market in Toronto – and if there’s one thing I’ve learned, it’s that trying to ‘time the market’ is almost impossible. Nobody ever really knows what is going to happen to interest rates and mortgage regulations; we don’t really know if buyers are feeling eager and confident or not, and we can’t control who else lists their home at the same time as you. The only thing we know for sure is what’s happening in the market right now. If it’s the right time for you to buy or sell a home, then it’s the right time for you.
Interest Rates, Inflation and Opportunites for Buyers and Sellers in The Spring Real Estate market
Despite the media headlines, the Toronto market is actually quite balanced right now. Toronto home prices peaked in February 2022, so it stands to reason that the year-over-year price comparisons look terrible. While it’s true that the average price of a detached house in Toronto decreased by 17.5% since last year, and the average price of a condo dipped by 11.4% – most of those decreases happened between March and July of 2022. Since then, prices have been levelling off – and we actually saw average prices increase by 5% between January and February 2023.
Most REALTORS we know list their own homes for sale at the beginning of the spring market, during the sweet spot when they know that the buyers are out-and-about and the sellers are still waiting to put their homes on the market. The sweet spot of high demand meeting low supply is a win for sellers – and it’s happening right now. If I were selling my own house this year, I’d be frantically getting it ready to list (and, of course, I’d call the BREL team to make it all happen).
Buyers take note! If you’ve been waiting for the market to stabilize before buying your first home or upgrading to a bigger home, pay close attention to what’s happening. For the first time in a year, the Bank of Canada didn’t increase the overnight interest rate this month, and with another potential banking crisis happening in the US, there are plenty of reasons to believe that interest rates are headed down, at least in the short term. Our inflation problems aren’t over yet and more interest rate hikes could be on the horizon…but the early 2023 spring interest rates may be the lowest we’ll see for some time. If you’re holding out for COVID-era interest rates, it’s important to recognize that those once-in-a-lifetime rates resulted from a once-in-a-lifetime pandemic – they aren’t coming back. If you aren’t already pre-approved for a mortgage, do it right now. If rates go down, you’ll still get the lower rate – and in the meantime, you can start searching for a home at lower-than-last-year prices. Win/win?
Everything, Everywhere (all at once, lol), Matters More Than Ever
While we’re seeing positive and encouraging signals of a strong 2023 spring real estate market in Toronto, we aren’t out of the woods. If you’re a seller, professional staging, smart pricing strategies, fabulous photography and killer marketing are still key to getting sold in this market, especially if you want top dollar. If you’re a buyer, there are still plenty of opportunities to negotiate, and we’ll hopefully see greater inventory after March Break and again after Easter. And if you’re looking to upgrade or downsize? Buying and selling in the same market reduces so many of the risks.
Have questions? Ready to take the first steps towards buying or selling your Toronto home this spring? Find out more about buying with BREL, selling with BREL or just get in touch.