Welcome the the New Normal…
If you’ve been tracking my blogs or social media posts as of recent, you’ll have noticed that I emphasized the importance of September.
Before I give you the results of Toronto’s September real estate market… I’d like to elaborate on why September is so important.
Over 2016 and the first quarter of 2017 we saw a market that operated on a level some would consider a frenzy. Simply put, Toronto became the hottest real estate market in the world. The second half of 2017 saw prices fall precipitously before beginning their rebound in September of 2017. The first quarter of 2018 was (wrongly) being compared to the first quarter of 2017.. which was CRAZY!!
This misleads the public in my opinion…
We then entered the second quarter of 2018 where year-over-year numbers were in line and actually in a positive variance from 2017.
We are now in the final quarter of 2018 and this is where things get interesting!
The market overall is performing well, although we are now seeing the type of month over month fluctuations which we’ve seen historically.
Prices rose moderately from August to September and actually at a slower rate than expected by many in the industry. Prices also rose from September of 2017 to September of 2018 by 2.9%.
With another rate hike expected before the end of 2018… I believe we are now beginning to feel the effects of increased interest rates. Buyers are becoming more conservative about out-of-the-box valuations which were being so recklessly thrown about.
Cheap and easy money is on its way out!
With all this said.
Record sales take place every day… just not in the same fashion which we’ve seen over the past couple of years. A property could receive 5 offers and sell for what the last comparable property sold for 4 months ago.
Properties within the Toronto boundaries (on average) are selling at 101% of their asking price.
This is primarily driven by the districts where affordability and desirability are high. For example, the average number of days on market in the Eastern Districts such as The Beaches, Leslieville, Riverdale are only 7!!!
This is a rare instance and the rest of Toronto is not performing in this fashion.
The condo market continues to perform strongly.. although last year 1,362 condominium apartments sold in Toronto. This year that number dropped to 1,282, a decline of over 5 percent!! This is due to affordability… not a lack of inventory!
If sales continue to slow due to affordability and increasing interest rates.. we could see a small market correction come. Not to sound pessimistic, just realistic.
Now more than ever… it’s important to buy that condo with the RIGHT layout and exposure.. that home with the DRY basement in a good school district…
I’m still extremely confident in our marketplace.. although as we enter into a more regularized market, its more important than ever to be making the right decisions in regards to your real estate portfolio.
I’m always happy to chat more!