As Realtors, we have a birds’s eye view of what’s happening in the Toronto real estate market. We don’t have to wait for the Toronto Real Estate Board’s monthly numbers, or wait for yet another analysis in the media. We see it, hear it and feel it first hand every day.
Here’s what we’re seeing now:
- The number of listings are up. Every day, we send newly listed properties to Buyers, and undoubtedly we’ve seen an uptick in the number of listings over the last few weeks. This isn’t unexpected: every year, Toronto Buyers welcome spring earlier than Toronto Sellers, resulting in an imbalance in the market. Too many Buyers chasing too few houses = bidding wars and higher prices.
- Seasonal fluctuations aside, we have seen more properties come on the market in the first 10 days of May than last year. Of course the total number of house listings for 2012 is still down, so this could simply be the result of Sellers playing catch up. Who isn’t tempted to list their house when you keep reading and hearing about your neighbours getting $100K over asking?
- The number of bidding wars are down. Yes, great properties in hot neighbourhoods are still getting multiple offers, but over the last two weeks, we’ve seen a number of houses that we expected to go into bidding wars, sit on the market. That’s partly because there are more properties on the market and partly because of Buyer fatigue (you can only lose so many bidding wars before you decide you don’t want to play the game anymore). Again, this isn’t unexpected at this time of year. The increased supply of properties on the market is better able to satisfy the demands of Buyers. Increased supply=less intense competition.
- We aren’t seeing as many crazy bidding wars with 10+ offers. When we do see it, it’s usually with properties that were priced way too low to begin with. Case in point: a condo at King/Niagara was listed at 249K and received 19 offers – no surprise really, given that sized unit in that particular building normally sells for $295-$310K. The final sale price? $310K, exactly as expected.
Now some fun with numbers. I went through the Toronto MLS statistics and pulled up the number of new downtown listings per month in 2011 and 2012 (downtown being defined as High Park to Leslieville, the Lake over to Bloor)
- January New house listings down from 147 to 136; new condo listings up from 822 to 878
- February New house listings slightly down from 213 to 211; new condo listings up from 919 to 962
- March New house listings down from 331 to 269; new condo listings down from 1210 to 1176
- April New house listings down from 326 to 281; new condo listings up from 1010 to 1217
- May 1-9 New house listings up from 103 to 192; new condo listings up from 384 to 536
- Total house listings DOWN: 2012: 3101 houses vs 3131 houses in 2011
- Total condo listings UP: 6,783 condos in 2012 vs 6,356 condos in 2011
So what does all this mean?
- The spring market arrived early this year, and seems to be ending early too. Bidding wars in the first few months were the result of a simple problem of supply and demand (coupled with super low interest rates that made home ownership seem more affordable)
- The increase in listings at the beginning of May could just be the result of the lower number of homes for sale in the first part of the year – OR it could be the first signal of a market that is trying to get into equilibrium.
The funny thing about Toronto’s real estate market, like every real estate market out there, is it isn’t some fancy phenomenon that happens all by itself. It isn’t what the Globe & Mail or the Toronto Star say it is. And it isn’t even what Flaherty or Gord Nixon or the economists think. The real estate market is just the sum of the decisions that Buyers and Sellers make everyday. It’s really as simple as that. What decision will you make?