What Happened to the Fall Market?

Now that TRREB has released their numbers and September has come and gone.  Here are our thoughts…..

Well, if there is one thing that we have learned over the past 12 years, both as Brokers selling real estate, investors investing in it, and homeowners - it’s that real estate is not one dimensional.  While we discuss the investment aspect, where the numbers and analytics are most applicable, for many real estate is also a home. A lifestyle. A necessity as a place to live - whether you rent or own.

For this reason, although we use analytics as a foundation and to provide guidance, the numbers and market are not necessarily navigating people’s decisions these days. We have received some phone calls from people looking to sell or buy due to life’s circumstances.

The numbers are clear. Number of transactions are down. Prices are down marginally thus far in Toronto proper.  And although we are seeing some multiple offers within the number of properties that are selling, the selling prices are reflecting the current market value, in our opinion. No longer are we in a market where we cannot narrow the sale prices using a Comparative Market Analysis Valuation Method.  Both Paul and I are relieved about that.  Unpredictable and incalculable selling prices, which we were seeing earlier this year, and for many years often had us worried about the appraisals for our buyer clients. And although numbers are foundational and used as a template, it keeps real estate somewhat predictable and grounded. Ultimately, properties should appraise for the price they are selling at. How else are you going to get a mortgage?

These days we are relying heavily on our network of Real Estate Professionals who are still conducting a fair share of business. These are agents who are still trading the majority of transactions in Toronto (15%-25%), which currently and has always sit at about 10% of our industry professionals with TRREB. We know that what they are seeing and experiencing within their neighbourhoods and transactions matter in real time. It tells us what’s going on at a micro level.  There isn’t a single neighbourhood we know of where an agent has more than 30% of the market share in that pocket. Meaning no one agent is seeing and experiencing everything.  And while we follow TRREB’s real estate numbers and data closely, we keep in mind that the data is historical.  We are reviewing September numbers in October. That market and activity has come and gone, and may have already shifted.  Real Estate Professionals conducting business these days is a trusted reliable source of the current market activity. With Real Estate always functioning as a moving target, we have to stay on the ball and in the know. To best serve our clients. We thank our industries pro’s and network for assisting with this. We also reciprocate.    

With two more interest rate increases on the horizon, here’s our Cole’s Notes. If you don’t have to sell right now, don’t. If you are comfortable where you are for the next year and a half, hang tight.  If you do have to sell, sell now. Don’t wait for the spring market unless you have too.  I know some of our clients have expressed that they want to sell but aren’t ready yet for lifestyle reasons. And we get that.

Consider checking with your Mortgage Broker (if on a variable rate with fluctuating mortgage payments) to see if there is anything you can do or change to reduce overall monthly costs.  And if you are a buyer looking for an investment or condo opportunity, now is a good time to start your search. Rents are up and prices are down. Capitalization rates are up. We have seen some good opportunities trade recently and we think more is coming in the near future as we experience further rate hikes.

Any questions. We are here. Reach out to us. We are happy to chat informally.

Cari and Paul