Toronto's Real Estate Market Is Showing Signs Of Slowing Down & Here's Why
So, you're saying there's hope?
Toronto's real estate market demand has been an unstoppable freight train these past couple of years, and home prices have skyrocketed, but the buyers' climate isn't without hope.
According to a new report by Move Smartly, a Toronto-based real estate authority, the city is showing early signs of a decline due to fewer buyers viewing homes and sellers receiving offers per night.
"Every week, I meet with my agents to discuss the real time trends we are seeing on the ground," John Pasalis, president of Realosophy, said. "By mid-February, we all started to see early signs of these trends, and we felt the market was likely going to cool down earlier than we originally thought."
Another encouraging trend for first-time homebuyers is the increase in homes that fail to sell on their offer night.
The report states that sellers usually list their homes well below market value in the hopes of receiving a barrage of offers.
This is a strategy that typically allows the seller to sell their property for five to 20% over the asking price, which is closer to the actual market value of their home
"When a home fails to sell on the seller's offer night, the seller will typically increase their asking price to one that they are prepared to accept (i.e., closer to actual market value)," Pasalis added.
Back in February, a trend saw that roughly 5% of homes with offer nights failed to sell, forcing them to increase their asking price.
"The combination of buyer fatigue, high prices and rising rates along with inflation and the macroeconomic risks ahead should contribute to a gradual slowdown in the market," he concludes.
So, while it's too early for anyone to see any real shifts in the Toronto real estate market, if these trends continue, the city could be on the way to a more manageable climate in 2022.