“What’s the real estate market like these days?”

“What’s the real estate market like these days?” “What’s happening with real estate?”

The last time we received the frequency of this question from clients, friends, acquaintances and family was back in 2009. And we get it. We are asking ourselves the same question, daily. With every interest rate hike, headline, transaction decline and price reduction - we are watching the market VERY closely. This market is demonstrating how hyper-local real estate really is. Based on the location, property type, condition of the property, and price point - these differences are causing real estate to behave differently these days.

Out of the small percentage of real estate that is selling, we are noting that it’s selling fast. Typically within 0 to 7 days on the market. And above the listed price. Often in multiple offers or pre-emptive offers (offers submitted prior to a scheduled bid date). We are also noting that these properties are often priced right on market or priced aggressively even, and are typically recently renovated, what we often refer to as “move-in ready” or “turnkey.” We have been reporting this trend we are seeing in real time on our social media platforms.

What does this mean? Well, it depends on your situation. We are witnessing a few savvy real estate investors, colleagues and clients choose to sell in this market in the hopes of pulling out their home equity before further rate increases followed by a subsequent further market decline. And then buying a renovation or tear down project over the next year or two at a “good deal.” These individuals are speculating that the market continues a downward trend. And with two more interest rate hikes anticipated they may be hedging their bets correctly. Overall, the intention is to upgrade their real estate exponentially in terms of size and location. Only then do the numbers make sense. As one must factor in the transaction costs (double land transfer tax in Toronto, commissions, legal fees, etc).

Trading real estate in Toronto is not without expense, and these individuals are factoring these costs into their model. The ones we are speaking to in this situation already have the capital on hand to invest in a renovation project and won’t be relying solely on construction loans or home equity lines of credit (HELOC). They are banking on interest rate increases in the horizon which is why they are choosing to sell now. In this fall market. As opposed to the historically hot spring market, which has always been the busier season for selling real estate in terms of number of transactions and average selling price.

With these market conditions we cannot stress the importance of ensuring that you know your numbers. The market is moving. And with interest rate increases to curb inflation, the real estate numbers (in terms of market value, number of transactions and market trends) are changing. For many of our clients real estate is a home, but it is also an investment, given the expense of the asset. Understanding your home value and the local sale prices and trends can better equip you to make the best decision(s) for you and your family. Note that these decisions are not always about selling. Maybe there are ways for you to save on your mortgage or maybe you want to take on a renovation? Maybe you would like to stay up to date on the market value of your property for your own knowledge? We have personally made changes in our own mortgage mid-term that saved us over $8,000.00. The savings can be significant. Whatever it may be for you, we always advise you to stay up-to-date on the value of your property and to get advice from a trusted professional.

Any questions about anything Toronto real estate related? Send us an email or give us a call or text 416-723-2372.

Cari and Paul