Week 174: Summer Slowdown or Market Correction? Here’s what not selling & what is selling in Toronto

How’s the Toronto Real Estate Market? 

Saying this louder so those in the back can hear: Let’s not confuse the typical summer slowdown with a new market correction.

This doesn’t mean that some big correction can’t happen. It certainly can. But remember, prices don’t just come down because they’re too high.

What can cause another serious drop in sales activity and a big increase in supply? In other words, what would remove buyers from the market and have owners list their properties en masse?

A big spike in rates can cause this, as we’ve seen.

What else?

People start losing their jobs, so they must sell to keep their heads above water.

What else?

The next rate hike pushes people over the edge, and they begin to default on their payments, so the market floods with a bunch of bank sale properties.

I guess all of the above are possibilities, but how probably are the scenarios?

The Bank of Canada will likely hike rates once more on July 12th during the next rate announcement.

That will definitely take the steam out of the summer market and probably put things into a deep lull until the Fall, when we should start seeing really solid inflation numbers.

Again, don’t get too excited about last week’s 3.4% inflation number. It seems like quite an improvement from the 4.4% in April, but if you remove the decrease in gas (we discussed why the big drop last week), there was no movement in inflation month over month.

So that 2% target isn’t as close as it may seem to some. Let’s see what June’s inflation numbers look like when they come out.

So where are the opportunities out there right now, and which sellers are still doing well out there?

Assignments

Although the assignment market has dramatically improved since Q4 2022, it’s still a blood bath in some cases. Not to be overly dramatic, but a “blood bath,” in my opinion, is when people are selling with zero profit and even taking a small loss due to fees. So if you have some cash lying around, get in touch to see if an assignment is a good option.

We have a few incredible units available at various urban projects, some at their original 2018 prices.

And in case you’re wondering what an assignment is, you can read all about them here.

Commercial Resale

Commercial real estate may not be for you, but a solid commercial property, even a mixed commercial/residential property, can be an amazing addition to your real estate portfolio.

The only challenge here is the financing requirements. You’ll need more cash, and many of the best deals are in need of some TLC.

So again, if you have some cash sitting around and want to pick up a solid, undervalued investment property, then consider a commercial space.

Aside from those two spaces, there aren’t a ton of other discounts available anywhere.

Landlord Owned Resale Houses & Condos

We’ve seen a big increase in panicky landlords offloading extra assets. Usually, small-time single-unit investors that believe real estate should always go up and that they were lied to.

Well, we all know that long-term real estate does very well, but strong and savvy investors know how to ride out storms like this.

But lucky for you, you may have an opportunity to pick up some undervalued one-bedroom condos throughout the city as that’s the main type of condo that’s on the market at the moment.

What’s happening with supply and demand these days? 

Good question! As you know, condos have been adding on supply like mad for the past two months, finally crossing the 2000-unit threshold in our urban communities (see charts below).

Historically, when condo supply is north of 2000 units, we usually swing into a buyer’s market.

House owners finally decided that enough was enough and stopped listing their places, mainly due to summertime and end-of-school busyness. Will we see another spike next week? Doubtful, but perhaps we’ll see some panicking after the next rate announcement on July 12th.

But we all know Torontonians don’t panic sell.

So what’s still selling well in Toronto?

I have a very short answer to this question.

Larger condos that our aging population wants to downsize into are flying off the real estate shelves. Up to $3mm, anything turn key is absolutely in demand, especially if there’s a terrace attached.

And surprisingly, people are still spending big money on large urban houses that need a full gut. Since developer money has dried up lately, hungry end users looking to lock down prime addresses in their preferred school zones are showing up with bags of cash and making big offers on pretty much anything in the West End right now.

Roncesvalles, High Park, and North Riverdale are leading the charge in that department.

What are you seeing out there? Let’s talk about it.

And if you’d like to book a call to discuss your specific real estate needs, you can do that here, and I really look forward to helping 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!

(please subscribe to the YouTube Channel here, where I go over all of these reports in more detail)

Urban Markets: Downtown & Surrounding Areas
House Average Price: $1,576,150
House Median Price: $1,409,232
522 Active Listings
63 Firm Sales This Week
Months of Inventory (MoI) ~ 2.27 (down from 2.37 last month)
Average Days on Market ~11.6

Condo Average Price: $811,676
Condo Median Price: $750,000
2012 Active Listings
111 Firm Sales This Week
MoI 3.77  (up from  3.16 last month)
Average Days on Market (DOM) ~16.40

Urban North: Rosedale, Deer Park, Moore Park, Forest Hill, & Lawrence Park
House Average Price: $1,961,167
House Median Price: $1,865,000
139 Active Listings
6 Firm Sales This Week
MoI ~3.15 (down from 3.47 last month)
Average Days on Market ~ 11

Condo Average Price: $1,496,944
Condo Median Price: $1,240,000
232 Active Listings
9 Firm Sales This Week
MoI 4.01 (up from  3.99 last month)
Average Days on Market ~ 31

Leaside, Davisville, Yonge & Eglinton
House Average Price: $2,189,892
House Median Price: $2,160,000
41 Active Listings
11 Firm Sales This Week
MoI ~ 1.45 (down from 1.57)
Average Days on Market  19

Condo Average Price: $820,370
Condo Median Price: $730,000
130 Active Listings
10 Firm Sales This Week
MoI 2.48 (up from  2.32 last month)
Average Days on Market ~ 11

Birch Cliff
House Average Price: $1,218,333
House Median Price: $1,225,000
31 Active Listings
3 Firm Sales This Week
MoI 1.88 (up from 1.63)
Average Days on Market ~ 7

Kingston Rd Corridor to Highland Creek
House Average Price: $1,088,333
House Median Price: $1,100,000
82 Active Listings
9 Firm Sales This Week
MoI 2.30 (up from 2.14)
Average Days on Market ~ 9.22

Condo Average Price: $608,500
Condo Median Price: $608,500
48 Active Listings
2 Firm Sales This Week
MoI 2.36 (down from 2.46)
Average Days on Market ~ 13

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