Rediscovered Area

Recreation and cottage markets are following a similar trend to the city market. This may be a good opportunity for buyers thinking of buying a cottage.

Our team works with excellent agents in different parts of the province. I am sharing a blurb by my colleague Mark Veer who‘s team works the Collingwood/Thornbury area.

The Collingwood/Blue Mountains real estate market has slowed a bit over the past few weeks. After two years of record high prices, we’re seeing signs that this upward trend is starting to flatten out.

Our market needed to chill out a bit. An annual 29% price increase for single family homes and 21% for condos is simply not sustainable.

Buyers are exhausted. Many have been through the multiple offer game several times and lost. It gets tiring fast.

The volatility of the stock market and war have also added to the current uncertainty.

It’s not all doom and gloom. Properties here are still selling. We are still seeing multiple offers on some. Two or three will come through if priced properly instead of eight to ten which was common just two months back.

Inventory levels are increasing and supply and demand are starting to equalize. Hence we have a calmer market.

Our area has been “rediscovered” since Covid began. We predict the area will remain a sought-after destination for weekend enthusiasts, retirees, and young families. We are truly a four season destination.

– Mark Veer

All Over The Board

Real estate prices are all over the board. We thought that the market had cooled and in some areas almost died. However we see that homes are still selling and many over their list price. The market is not dead. Pricing and expectations just have to be real and not overinflated. What sold a couple of months ago will probably not sell for the same price now. This will create some new opportunities for some as it may be a good time to upgrade and/or buy.

State of Transition

Real estate market is in a state of transition. With more listings coming on the market, higher interest rates and buyers being a bit more hesitant in buying and paying too much we are seeing a readjustment in prices. Those that have bought at the peak of the market are having trouble selling for top dollar. Appraisals for those that paid too much for homes are coming in lower and those that can’t come up with more downpayment and stretched to buy could have a problem on closing. We need to keep pricing and expectations real.
Pricing depends on the property, Although we are seeing prices reflect more what sellers want rather than a lower price to attract interest, this is not a strategy for all properties. Those properties that are highly desirable may do better with a lower price. It all depends what the product is. Marketing and home preparation are key. You need to be the best one out there to sell and get top dollar.

Rental Competition

The rental market in Toronto is hot hot hot… with an influx of Ukrainians fleeing Ukraine they are looking for places to rent. Many are coming with money. Space is at a premium. When rentals come to market they have a number of people who are lined up ready to jump. Sometimes the Ukrainians don’t stand a chance. The competition is fierce and can be discouraging for all.

The group of Ukrainians coming in are also looking for jobs. Most are educated and ready to work hard. The service industry which has been so short on staff should be happy. For many the stay in Canada will be temporary. It won’t be easy.

Market Change

This too shall pass… an expression that now applies to the real estate market. Earlier in the year we experienced some intense bidding wars for homes, sometimes with over 20 offers and 100 showings in a week. The prices were jumping up quickly as buyers snatched up houses. 4 months later this scenario is no longer the case. We are still seeing multiple offers but not always and sometimes there are no offers that come in.

Interest rates are up, inflation is up. Buyers are not jumping as high and sellers are often disappointed with results. Interestingly the change in market is starting at the bottom. Usually it starts at the top. With the change in market will come a change in pricing strategy. We are a market in transition.

The jury is still out for condos. Condos did not experience the same recent activity and surge in prices as homes. With the end of the pandemic condos may get a good bump up this year.

Time to Compromise

The problem with buying a home is that the supply and selection have been so low that many buyers have not been able to find what they want. The idea of a “dream home” is almost a dream for most. Buyers don’t want to settle but they also don’t want to or can’t pay the price for what they want. And the market keeps going up. Many buyers have been looking for years.

We have always said – if you really want to buy a house, you will. In todays market you just have to compromise and compromise a lot. Selection is starting to look a bit better as we start the spring market.

Early Spring Market

Beginning of spring market in Toronto appears to be busy. We are seeing more homes come out. World instability has perhaps pushed those who were thinking of selling to sell. Potentially rising interest rates may also push buyers to buy. Inflation is definitely on its way up and will have to be addressed. Here is the thing – we have no idea what will happen. Any attempts at forecasting are speculative at best.

Cracks in the Market

Taking a snapshot of current market is not that simple. Clients often ask us – if you had to guess what do you think will happen with our real estate market in the next year. This question is difficult to answer.

Currently it appears that the market remains very strong and a number of houses are getting very high numbers. However we have seen a few cracks in ”the crazy market” Not all houses in all areas are getting crazy prices. Some are selling for very rational prices and anything that is obviously overpriced is simply not selling. Condos are selling but are definitely not as hot as houses.

The advice to buyers and sellers is to buy and sell when the time is right for them and not to try and predict the timing. The last couple of years has shown that predicting the future is impossible.

Real Estate Teams

The concept of having a real estate team has grown in popularity in the past number of years. There are many reasons why it makes sense to hire a team. Firstly, there is always someone there to service the client for whatever need they may have. Agents who are good are busy and it is really hard to be everywhere at the same time. A team who has specialized people for each category is able to move fast and efficiently. There is someone handling home preparation, staging, social media, and advertising. A team can handle all of a clients real estate needs whether it is buying, selling or leasing. We become a group of consultants who are able to service families of different generations with all their needs.

On the other side, younger less experienced agents are able to be mentored by more experienced agents. It is a win win for everyone to hire a team.

House of Cards

Over thirty years ago my grandmother told me that a good friend of theirs who had been very successful in buying and selling real estate said: “Toronto is built on mortgages. If I don’t have a mortgage I’m not making money.” So many years ago he was before his time. Today, the concept of making money on having a mortgage has never been more true.
In many cases buyers are not really thinking about paying off the mortgage when they buy. They are thinking more about borrowing (and in most cases borrowing a lot) to live where they want, then possibly upgrading, and then eventually selling when they need. Or, homeowners are taking equity out of their homes to invest and making money off other investments. Older parents in expensive homes are taking equity out in order to help their kids buy real estate. It appears that everyone has a mortgage. The low cost of borrowing and low inventory are driving prices up in a sharp line. The question is – how sustainable is this and is this a house of cards that will eventually topple over.