I’ve been thinking a lot about what the future holds for Real Estate in Toronto, the World’s Greatest City.
Here’s how I see people Realestating from today onward(yes that’s a verb now)
TL; DR – Watch the video at the bottom or just call me 416-434-1511
Watch the video here if you’d rather not read below. It’s subtitled so you don’t even need any volume
▪Understanding real estate at the macro level is and always has been important. Real Estate & Construction alone contributed to just under $400 Billion to Canada’s GDP in Feb of 2020. That’s a whopping 50% more than Manufacturing contributing just less than $200 Billion in the same period. So seeing increases or decreases in those figures can speak to how well the Canadian economy is doing overall.
▪However, if you’re making any buying and selling decisions the National up/down/sideways is completely irrelevant.
▪What matters is how the specific market you’re buying or selling in is performing and you can only do that with real time hyper-local data. There’s no other way.
▪Week/Week & Day/Day Reporting is what will be expected NOT month/month.
▪Every single day buying and selling decisions are made using real time data using the most current stats. Toronto’s urban markets change way too fast to put any real weight on monthly reporting that is usually a week late anyway.
▪I’ll tell you right now, my weekly numbers are much more relevant to you, the urban dweller/buyer/seller/enthusiast than any news or TREB report you see out there. Fact.
▪Will view less homes and make quicker buying decisions
▪ You MAY have a bit more breathing room when making an offer or even deciding if you should make an offer. Sure, offer dates, pre-emptive offers (lesser known as bully bids), and a dozen other offers are still happening but are significantly reduced but you’ll be able to take a little more time to get your ducks in a row.
▪It has been normal to go “open housing” and go view literally every single available home before making your final decision. As more people rely on 3D tech (and it’s going to get way better) this will become a thing of the past. Covid times have taught us how to be more efficient and responsible with our time.
▪Despite what you might think Buyers aren’t and won’t be buying houses and condos completely sight unseen. They may be making offers conditional on viewing the homes. We’re a generation or two away from buying resale completely sight unseen as a regular practice.
▪The only sight unseen buys I’ve seen are for insane deals. I saw a condo sell in hours with one phone call because it was priced so so so low. Why? Who knows…
▪Open Houses will be completely eliminated in time. They may be arguably effective tools in selling a home but they’re usually a giant waste of time for a Seller.
▪Highly Specialized Agents are what Buyers & Sellers will be looking for. Knowing the ins and outs of a community without having to ‘crash course’ it by driving around a new area the day before your clients want to make an offer are over.
▪Local intelligence and local relationships will help buyers win and help Sellers net more.
▪A lot more sales will happen off MLS. As Sellers and listing agents stick to their inner, local circles to avoid potential exposure by controlling every step of the sale process. Having a local pro on your side will help you snag those off-market opportunities that are always available.
▪You’d better make sure the agent you’ve hired understands the digital space.
▪3D online experiences, full high res photo packages and professionally measured floor plans like I’ve been doing since 2013 MUST be part of each and every listing for both houses and condos no matter the price point.
▪Listing strategies MAY change as more and more listings are listed at prices that a Seller will accept vs. grossly under-listing and having an “offer night”. Although this is yet to be seen as it seems many agents are still using the under-list strategy even in these times (successfully too I might add).
▪Your house will not likely sell for more than the last similar house like it has been. Sorry! The days of day/day and week/week gains are gone…for now. Expect a massive spike in prices once we’re fully back out and about in a couple of years (likely less) but for now prices should remain fairly flat for a few Quarters at least.
▪Developers will spend less money on sales centres and more on creating virtual experiences. The days of packed sales centres are over.
▪Buyers of pre-construction condos closing now and into early 2021 will have to likely eat some monthly negative cashflow as rental prices have taken a serious hit. We should be trending at or over $4/PSF rent right now but many units leasing at $3.19+/PSF.
▪Buy-it-now options will start to become a thing as more people get comfortable making pre-con buying decisions without walking into a sales centre. Most of the time, sales centres don’t add any more value other than contribute to the frenzied FOMO that makes people do things they may not want to do.
▪Price per square foot won’t take a hit however developers will likely be more flexible with terms and incentives. Sales have been happening this entire time and will continue to happen as Buyers get more comfortable.
▪Pre-Con sales outside of the urban communities will boom. With prices in the $600’s/PSF and up they’re no-brainers as the core gets too expensive for a lot of people.
▪There will be new launches and they’ll be soon. Most projects have delayed until Fall so expect a TON of pre-con launch activity then.
Will Prices Go Down?
▪Toronto’s urban communities haven’t seen a significant decline in prices (as of writing this anyway) and this should remain constant as long as jobs in the homeowner demographic remain relatively stable.
▪So far the majority of the job losses have affected the rental market more than anything.
▪If you’ve been following my weekly updates then you’ve seen average prices come down since the beginning of March but a lot of that is due to much less activity in higher prices properties in both houses and condos.
▪Prices may trend down for specific properties and condo buildings but no, across the board we shouldn’t see any major dip in prices beyond what we’ve already seen.
▪Again, I write this with caution as we don’t 100% know what jobs will continue to be axed as we re-integrate humans back into the wild.
▪I know that we have a strong tech sector with Shopify being Canada’s most valuable company as of this morning. They are on track to double their current workforce by 2021 as are many other companies in thriving industries.
▪I’m worried about the Film industry but Banking, Some parts of Tech, Healthcare are all strong right now which are so far keeping Buyers buying and sellers selling and upgrading.
Care to comment below? Would love to have a convo.
That’s it for now, hope you have a great Thursday and I’ll talk to you Sunday/Monday when the new numbers come in.
Cheers! Call/Text/Email as always 416-434-1511 or ara [at] thespringteam.ca or via my contact form here.