Kit Kadlec – Cana­dian Real Estate Magazine

Outside of the condo mar­ket, there’s increas­ingly lit­tle room for price nego­ti­a­tions in good ole Toronto, with homes sell­ing at 100% of the ask­ing price within three weeks, accord­ing to new data.

Com­ment: As I keep say­ing, the cur­rent heat in the mar­ket is due to lack of inven­tory more than any­thing. I have heard recently that 50% of houses in the $600–900,000 range sell for over ask­ing. So almost half of houses are get­ting mul­ti­ple offers. That is because there are still WAY more buy­ers than sell­ers. Has been for years now. Until we get list­ings up by 1,000% the pres­sure is not going to let up. It was like this in 3–4 years ago when mort­gage rates were over 5%, and before that when 5.95% was a good deal. So even if mort­gage rates dou­ble, it will not have any effect. It is inven­tory we need.

The Toronto Real Estate Board released its mid-month resale hous­ing fig­ures, which also showed prices were up in all sec­tors from a year ago, and espe­cially in sin­gle fam­ily homes.

“Strong com­pe­ti­tion between home buy­ers in many parts of the GTA has resulted in sell­ers real­iz­ing their ask­ing price in a short period of time,” said Jason Mer­cer, senior man­ager or mar­ket analy­sis for TREB. “The fact that homes are sell­ing for 100% of the ask­ing price, on aver­age, sug­gests that sell­ers are very much in tune with the cur­rent mar­ket sit­u­a­tion and know the fair mar­ket value of their home.”

It also sug­gests buy­ers have lit­tle chance of scor­ing a deal below those increas­ing val­ues. In Feb­ru­ary, Toronto homes sold for an aver­age of 99% of the ask­ing price.

But there is one excep­tion, namely condo apart­ments. The aver­age price in mid-March of $336,397 is 4% higher than a year ago, but it is 1.4% lower than the aver­age condo apart­ment price weeks ear­lier at the end of February.

Com­ment: Which fol­lows what I said above. There are 25% more con­dos sell­ing than houses, more sup­ply. And that does not include new condo sales. Or condo town­houses. I would haz­ard that almost twice as many con­dos as houses are sell­ing. Thus, a lot less pres­sure on the supply.

“I’m espe­cially see­ing it at the high-end, with devel­op­ers offer­ing (very high) Real­tor com­mis­sions for prop­er­ties that have sat on the mar­ket for quite a while,” Woj­ciech Pianka, a Toronto mort­gage agent with Mort­gage Alliance, said. “Some of those con­dos are also sell­ing for less now than they did pre-construction, mean­ing investors are hav­ing to sell for less than they paid.”

Ana­lysts point out that It can be dif­fi­cult to read too much into trends over just a cou­ple of weeks, but there is another sign point­ing to a soft­en­ing condo market.

Com­ment: Exactly! One month or two weeks does not a trend make!

While the aver­age home listed in Toronto in Feb­ru­ary sold in 24 days, it was tak­ing con­dos 29 days on aver­age to sell.

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Con­tact the Jef­frey Team for more infor­ma­tion – 416−388−1960

Lau­rin & Natalie Jef­frey are Toronto Real­tors with Cen­tury 21 Regal Realty.
They did not write these arti­cles, they just repro­duce them here for peo­ple
who are inter­ested in Toronto real estate. They do not work for any builders.
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