June 2021 Newsletter
Market is slowing but prices are at all time high! HUH!?
What the heck is happening & what are my options as a buyer & seller?
On the ground activity takes a while to show up in the numbers. We are seeing less buyers than Feb/March, more homes re-listing as they do not receive offers on offer night & less bidding wars.
So prices are falling, right?!?
Nope, unfortunately for buyers prices are not falling. They are up again this month but If anything we are starting to see them plateau. The average selling price across all home types was up by 28.4 per cent year-over-year, reaching a record $1,108,453. But, on a seasonally adjusted basis, the average price increased only by 1.1 per cent between April and May 2021. So as you can see the last couple months have been flat.
Overall 11,951 sales were reported in May 2021, more than double what sold in a very slow May 2020 when the market had stalled because of covid.
Why aren’t prices falling?!
Inventory is still very low. It has increased a bit since last month when it was under 1 Month. We have 1.3M currently available. Meaning if no other homes listed for sale tomorrow we would sell out of all homes in T.O. In roughly 5 wks at this rate.
A balanced market has 4-5 months of inventory, a market where prices start to fall has 6+ months of inventory. We have not seen 6+ M of inventory in T.O. Since 2009.
So what does this all mean?
Prices are at a all time high. Many buyers especially 1st time home buyers are frustrated & I don’t blame them. Many have given up. Some paused. Other chosen to relocate. Still, we see buyer demand strong because of the pent up demand from covid and since inventory is low the current trends should continue for this year and I do not anticipate values to drop. I do see them flattening out and staying stable for 2021.
If you decide to buy now, buy what you can afford, be patient & plan to hold for a minimum of 5 years in that home. By holding if a downturn happens in the next couple years & you can afford to pay the mortgage you will most likely gain any equity lost after 5 years.
If you sell in 5yrs you have built equity and can afford your next move(taxes,fees,etc).
Another suggestion is to buy a home that’s smaller than you need but has the potential to expand.A 2 bed semi on a long lot, in 5 years, take equity out & build back to make it 3 or 4 bedroom.
If you are planning on selling, assess what your next move is, are you upsizing, downsizing, moving out of the GTA? Discuss what you should do first, sell first or buy first and the pros and cons before proceeding.
With this much money at stake, do not let the market rush you or buy/sell out of FOMO. Do your research, weigh the pros & cons, decide what you are willing to sacrifice & what your must have’s are based on your lifestyle & then make the best choice for you & your family.
Interesting Articles
Toronto housing market cools down in May as exhausted buyers take a break
https://www.theglobeandmail.com/business/article-toronto-housing-market-cools-down-in-may-as-exhausted-buyers-take-a/
NDP housing critic motions for speculation and vacancy tax
https://nowtoronto.com/lifestyle/real-estate/ontario-ndp-to-table-motion-on-speculation-tax-in-toronto-real-estate