There is much news in the media these days that the Toronto real estate market is 'softening' or the bubble is 'bursting', but that's not how it appears from our vantage point. What we are suffering from is a definite lack of inventory, but not that much different from what we experienced last January. As a result we are starting to see some bidding wars and bully offers again, particularly for detached homes in w01 and w02. Overall however, we are also seeing a lower listing to sale ratio and an increase in the average days on market, but on average, prices in the west end are up from this time last year. We'll let the numbers speak for themselves and then give you our two cents :).
What Does This All Mean??
We need to keep in mind that January 2017 was the lead-up to the craziest few months in real estate that I have seen in my 18 year career. Record high sale prices, crazy bidding wards and aggressive bully offers coming in pretty much as soon as houses hit the market. There was absolutely no discernment, everything was selling quick and for crazy prices. At the time I didn't think that market was sustainable, and it turns out that it wasn't. The market began to soften at the end of April/beginning of May, the time that it typically is at it's peak. I think the market has been correcting since then, but there is no sense in comparing our current market to the insanity that occurred from February to April of last year.There have been much-publicized changes to the mortgage qualifying rules as of January 2018, which now require that buyers applying for new uninsured mortgages (more than 20% down) will have to qualify at the higher Bank of Canada five-year benchmark rate. However, buyers with less than 20% to put down, and those looking for variable rates or less than 5-year terms, were already being qualified at that rate; and buyers who are renewing with the same institution do not require stress testing; so this actually affects quite a small percentage of the buying population.The trend in the west end Toronto real estate market, so far this year, is showing higher sale prices in most sectors, compared to last year, but lower list to sale ratios and higher average days on market (DOM). What this says to me is that homes are being priced in accordance with small increases from last year's prices, but generally they are not selling for full price and they are taking longer to sell. This, by definition, is a balanced market, but only time will tell. We will certainly keep you posted on the market and here are December's numbers, if you would like to compare.For more insights into this market or if you are curious about what your house is worth, feel free to get in touch, we are always available to chat!