Is It A Good Time To Sell Your Home In Toronto?
The Long Answer…
The Toronto real estate market has been trending upwards lately and seems to be recovering more quickly than anticipated after the somewhat alarming decline we saw last year. During that period of time, buyer interest reached an all-time low, with properties sitting on the market for longer periods of time, as would-be buyers tried to come to terms with an unpredictable economy.
Even with this concern, Toronto property owners remained cool, maintaining a limited supply of properties. This positioned the market to swiftly shift back to a seller’s advantage in the event of positive news.
That good news came in January when the Bank of Canada raised interest rates by a modest quarter percent, which was the lowest increase we’ve seen since March of 2022. Buyer optimism was boosted by this decision and also hinted at a possible end to the regular rate hikes we had grown accustomed to seeing.
Toronto’s homes enjoyed renewed interest after the announcement in March that interest rate increases would cease. As competition became more intense with less homes on the market, sellers began receiving asking prices for their properties.
As investors turn to government-backed bonds and away from riskier assets, such as regional banks and technology companies, fixed interest rates may experience downward pressure. A shift in this direction could see a cut in fixed rates for the fist time in several years. It is also speculated that variable rates could see a reduction in the near future.
After a year of mostly negative news for Toronto buyers, this wave of positive developments brings a refreshing change. This will likely lead to a hot spring market, like we have seen for many years in Toronto.
With that in mind, real estate activity typically slows down in the summer months, and this trend is expected to continue into the end of the year. Exhaustion among buyers coupled with summer time fun and activities with the children tend to be the driving forces in this downward trend which is held with the return to school and Christmas not long after.
We believe if rates continue to hold in April, buyers will be active and sellers should anticipate lots of interest, and likely multiple offers on their homes. Pricing slightly lower than market value in our current situation, in which inventory is scarce, can lead to a lot of interest. With many buyers looking for a home in Toronto, this is a strategy we are seeing employed a lot more often in the last couple of months with great effectiveness.
Property values are still down Year-Over-Year, but let’s be honest, they were unsustainable and unrealistically sky high in Toronto. Looking at the numbers, detached homes have taken the brunt of the blow while condos and townhomes have been more resilient when compared to last year.
Something else to consider is that prices over the last two months have increased, climbing 6.8% in that time period according to the Toronto Regional Real Estate Board.
The Short(er) Answer...
While properties in Toronto are still sitting on the market for longer than they were last year (approximately 20 days on average), prices have risen over the last two months and we are seeing them sell for 100% of asking price and sometimes more. The average sale-to-listing price was actually up last month for the fist time since May of last year.
There are some caveats.
Pricing properly is paramount. Overprice and your property may sit for a lot longer than you are comfortable with. This will not only curb initial interest in your property when it hits the market, but you will also have to do a price adjustment. This is not usually a good look.
Patience. As I mentioned things are selling, but they are taking longer than we are used to in the city of Toronto, and really most of the major urban centres within two hours of Toronto.
Toronto is and will remain a highly desirable place to live. With new people coming to our city every day and a shortage of inventory, we should see prices hold steady and possibly even begin to rise again.