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June 2017


June 2017


Dear Friend


Traditionally, the Toronto spring market’s months of April and May are the most active months for Toronto realtors. 2017 bucked that trend, as March’s record-breaking number of 12,027 homes sold (18% more than March 2016) took many buyers that would have normally purchase in the spring market.
While the 10,196 homes sold in May are great numbers, they are down 20% from May 2016. The listing inventory increased to 18,477 homes and though it’s an improvement, we are still in a Sellers’ market as buyers do not have many choices of homes to buy.


The question of price is a great question. The prices that homes sold in February and March were record breaking prices, perhaps overinflated due to competition and the media. As the market took a breather after 30% plus price increases, those sellers who had bought and were waiting to sell in the spring market are now not getting the prices they expected. Today’s sales are not getting March’s record breaking prices! Prices are still strong, but are down from the prices we saw in March. Sellers caught owning two properties have to adjust their price expectation. The result, prices down. Those sellers pricing their home correctly in the new market conditions are getting multiple offers and selling quickly.


The good news is that the underlying factors that have caused price increases in the Toronto market have not changed. Lack of supply, low interest rates, high immigration, a strong economy and other positive factors mean that prices will continue to rise at a more normal 4%-7%. But prices will rise!


Some buyers have adopted a “wait and see attitude” before they act, this reduces competition. Over the next two months Sellers with two homes will reduce their prices so as not to be stuck with two properties. These factors will create a great opportunity to buy before we go back to the type of market we saw last year. Prices will not go up 30% in one month, but the demand is too high for prices not to increase.


If you are considering buying or know of someone who is thinking of buying, give me a call. Let me share with you my thoughts about why Toronto prices can only increase. The rest of the world thinks Toronto is a great place to invest in real estate, we should as well!
 


Have a great month!


 
Your Friend in Real Estate, Kelvin Wong

 


May 2017


May 2017,


Dear Friend,


Finally, a little respite in the frenzy of buying Toronto homes! A frenzy, I believe, created by the media, which were predicting prices would increase by over 30% in March. Really, a self-fulfilling prophesy! By the way, this is the same media that a few months back was speculating that Toronto prices were abnormally high, and the bubble was going to burst and prices would fall. My only comment; the media is primarily concerned about ratings and advertising income, so their news and headlines are biased to achieve their goals!  


We started 2017 with extremely low home inventory, and an abundance of buyers. This continued the trend of multiple offers and led to an abnormally strong Toronto market! The media jumped on the band wagon and a difficult situation became even more so. The average price jumped 21% since the end of 2016, and some areas and properties increased by over 30% in the same time period.


Such huge price jumps could not be sustained forever, and as buyers took a pause, more listing started coming on the market, balancing the demand. On April 20, the government added a 15% tax on foreign buyers, (estimated to be 5%-8% of the GTA sales) which also made some buyers adopt a wait and see attitude as to how prices would be affected.


So here are the facts for April. 
 

  April 2016 April 2017 YTD April 2016 YTD April 2017
Properties Sold 12,016 11,630 34,623 36,822
New Listings 16,252 21,630    
Average Price $739,762 $920,791 $697,679 $888,638

 

The basic factors have not changed in the GTA. Low interest rates, great economy, confidence, immigration and continued demand. This will continue to drive the market in 2017. Sellers who priced their homes at prices in excess of the market value will either take their houses off the market, or adjust the price to reflect the current market value. The media will make a fuss of someone reducing their house by $100,000 and still not selling. (Really to be expected if the house is priced at $1,300,000 and is only worth $1,000,000).


What we are experiencing at my company, RE/MAX Realtron, is that the number of messages, sign calls and appointments to view our listings remains strong, and buyers now have more properties to look at before they decide to purchase. (We had 1,113 transactions in April) If you are considering buying, now is a great time, while some are waiting to see what happens. The additional inventory and lighter demand puts you in a better bargaining position than before.


Let’s talk, the situation is complicated. I’ll be happy to explain it all and show you how you could benefit from my experience in the current circumstances!


Have a great May,

 

Your Friend in Real Estate, Kelvin Wong

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