Week 152: Bidding Wars may be back but that’s not the full story

An end to the trend!

You can catch up on last week’s article here.

In my opinion, I need three weeks for something to happen before I can call it a signal. In this case, for the past two weeks, we’ve had a good amount of new supply come to market after the Holiday lull.

Real Estate bears and others that have zero clue what they’re talking about saw that, and some of the negative news about the economy that was prevalent over the Holidays weeks/month as the coming of the 2nd correction.

But anyone with a couple of brain cells, some market knowledge, and a window into how people buy and sell real estate in Toronto knew better.

Every single year there’s a pullback in listing supply ahead of the holidays, then a slight surge of supply mid-winter, then a pullback ahead of Fall and a surge again. No signal, nothing new. I showed you the supply chart in weeks 150 and 151.

But this time, we have to layer in the uncertainty of the economy. More specifically, inflation. Some people think the BoC will keep raising rates until inflation comes back to earth. But many need to consider the many other global events causing products to be more expensive. (continued after chart)

Urban Markets: Downtown & Surrounding Areas
House Average Price: $1,441,552
House Median Price: $1,328,000
325 Active Listings
29 Firm Sales This Week
Months of Inventory (MoI) ~ 0.94 (down from 1.60 last month)
Average Days on Market ~ 14.83

Condo Average Price: $847,778
Condo Median Price: $695,000
1357 Active Listings
69 Firm Sales This Week
MoI ~ 1.81 (down from 2.24 last month)
Average Days on Market (DOM) ~ 25,49

The rate hikes have already killed the demand for housing. The only people transacting now are those taking advantage of opportunities (longer-term vision and can see beyond the short-term impact of higher rates) or those that need to sell for whatever reason. Aside from that, any excess demand has been eliminated.

There’s no benefit to hiking rates any further. Will the March announcement be the good news everyone’s been waiting for?

The Jan 25th announcement was the first time since the first rate hike that we had a normal 25bps increase. And the announcement that the BoC may be able to hold this rate and not have a further increase as long as inflation moves in the right direction for the 4th month in a row and unemployment doesn’t get out of hand.

But don’t get that twisted. Rates won’t come down as fast as they went up. (continued after chart)

Urban North: Rosedale, Deer Park, Moore Park, Forest Hill, & Lawrence Park
House Average Price: $2,391,833
House Median Price: $2,450,000
89 Active Listings
6 Firm Sales This Week
MoI ~ 1.65 (down from 2.62 last month)
Average Days on Market ~ 3.83

Condo Average Price: $1,256,642
Condo Median Price: $1,265,000
175 Active Listings
12 Firm Sales This Week
MoI ~ 2.14 (down from 2.84 last month)
Average Days on Market ~ 42,75

I’m seeing too many realtors getting too optimistic with their social posts, and it’s not a good look. The same thing happened when an opinion piece came out from one of the big banks about a potential halting of the hike cycle many months ago.

You can’t jump the gun on news like this when so many things are out of the BoC’s control. Today’s Realtor needs to be much more Globally aware and understand how things happening thousands of miles away can affect your house in Leslievile.

It’s easy to be optimistic right now after a few weeks of stock market rallies, positive inflation news, lowering bond yields that are dropping some fixed-rate mortgage products, and the positive January 25th rate announcement. That’s a lot of good news, which has gotten many buyers off the fence and onto the offer table.

Over the past week and the next few weeks, you’ll see many realtors putting out content showcasing how many offers they got on a listing or how much showing activity has improved. These aren’t just one-offs, either. Many properties are getting sold fast and for big money right now.  (continued after chart)

Leaside, Davisville, Yonge & Eglinton
House Average Price: $2,635,077
House Median Price: $2,110,000
28 Active Listings
5 Firm Sales This Week
MoI ~ 0.75 (down from 0.91)
Average Days on Market ~34,5

Condo Average Price: $631,600
Condo Median Price: $570,000
112 Active Listings
6 Firm Sales This Week
MoI ~ 1.61 (down from 2.52 last mth)
Average Days on Market ~ 24.4

Buyers are feeling good right now. But how long is that going to last? If you’re considering selling, now may be a good time to get out there and test the market.

I’m not sure how long this window will be open. If you previously had your property on the market and had no luck selling, now may be a good time to try again. But details matter. Buyers are pickier than ever.

We’re also seeing a lot of buyers that are a little behind where the market is right now. Their expectations are about  $50K to $100K below where they need to be. They think phenomenal deals exist, and sellers will bend to any request.

This is not the case. Toronto and surrounding area sellers are smart. They don’t panic and know the value of what they have. They’re not, in most cases, giving you deals of a lifetime.  (continued after chart)

Birch Cliff
House Average Price: $1,007,000
House Median Price: $1,007,000
14 Active Listings
2 Firm Sales This Week
Months of Inventory (MoI) ~ 0.89 (down from 1.01)
Average Days on Market ~ 36

The door on phenomenal deals has closed, and I don’t see it opening again until the next correction, whenever that is.

But prices are still down from the peak; sellers are reasonably flexible, and some may even be open to flexible financing options like a Seller Take Back mortgage, so make sure you’re working with a pro who understands how to work this market and today’s savvy seller.

The future is bright for Toronto Real Estate, and where you get your real estate content is so important today. So next time you see your favourite TikTok or IG realtor talking about something, run it by me, and I’d bet I can poke some serious holes in their bearish claims. Like I did here.

Kingston Rd Corridor to Highland Creek
House Average Price: $836,700
House Median Price: $836.700
37 Active Listings
1 Firm Sales This Week
Months of Inventory (MoI) ~ 0.54 (down from 1.21)
Average Days on Market ~ 9

Condo Average Price: $637,500
Condo Median Price: $637,500
34 Active Listings
2 Firm Sales This Week
MoI ~ 1.63 (down from 2.30)
Average Days on Market ~ 16

Any questions? The entire team and I are here to help. Email/comment/text/smoke signal, and we’ll get back to you.

Have a wonderful day, and I’ll see you next week. Don’t forget to subscribe to the blog so you get this in your inbox asap, and we’ll see you on Youtube!

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