The Times They Are a Changing!
No surprises as the Toronto Real Estate Board released the May sales numbers. 7,283 properties sold and GTA Realtors listed 18,679 homes for sale. The year-to-date average sale price stands at $1,274,869, up 16.4% since the end of 2021.
Without a doubt, the increase in the mortgage rates has impacted some buyers at a psychological level, where they have decided to wait and see what happens to prices. All buyers secretly hope that prices fall, they buy, and the next day prices start increasing rapidly again. Not really a realistic scenario.
Here is the reality of the market. Due to a shortage of homes for sale, prices in January and February rose at an unsustainable rate of 25%+. In March, Sellers and many inexperienced Realtors continued to offer properties for sale at 25% more than the previous sales and buyers balked at the prices. Homes no longer sold overnight and the impression was that homes were no longer selling as “For Sale” signs dominated the landscape where before “Sold Signs” did. With the mortgage rate increase taking some buyers out of the market and others deciding to see what happens, the number of homes sold dropped compared to last year.
The term, “a balanced market” is being bandied about. A balanced market is defined as a market in which there are 4-6 homes for sale for every sale that takes place. We had 7,283 sales in May and approximately 15,433 homes for sale, we are NOT in a balanced market! The May numbers show that across the GTA home sold between 99% and 103 % of the asking price. This is more indicative of a more realistic pricing and marketing strategy and that buyers are still active and willing to buy.
This is the time to upgrade your home or increase your investment portfolio. Contact me and let me show you the reality of the market and how you can turn it to your advantage.
Have a great June!