Week 177: Supply Signals Provide Hope Amid Rate Hike Uncertainty…For Now

Some positive news nobody is talking about right now is that listing supply for all areas has pulled back.

Meaning at this time, owners are holding strong and putting up with increased payments (hello Trigger Rate) and not panicking. Yet.

Will panic set in as we move toward another potential rate increase?

Isn’t the whole point of these tightening measures to actually cause pain?

I think that’s what a lot of people are missing here when complaining that the Bank of Canada is “causing problems for people.”

Isn’t that the point?

The whole point of all of this is to break people and things. That seems to be the only way people will stop spending money.

So ultimately, all of this is our fault. Including the companies, we rely on for our basic daily needs.

That’s capitalism, I guess. If there’s an opportunity to profit, it’ll be taken. And on the consumer side, if you’re not yet actually feeling the pain in the pocketbook, we’ll keep spending until we can’t.

So this is all on us.

When you feel like blaming big bad Tiff Macklem at the Bank of Canada and thinking you’re smarter than them, spewing all this nonsense about “mortgage interest is what’s causing inflation, duh.” so if you stop that, then all of our problems go away. Honestly, lol.

It’s time to put our wish.com economics degrees away and let the professionals take the wheel here. We need to understand that these measures are designed to break people and put a halt to overspending. To eventually quell demand. Unfortunately, we humans, well, most of us anyway, won’t stop until we get slapped.

Some of us are getting slapped as we speak. I’m a prime example. Rode the massive successes of 2020 and 2021 into a big house, a new car and two investment properties.

Now, I’m going to be extremely vulnerable here. Most of those decisions were mistakes.

The good news is that I was able to help clients make strong decisions along the way and was able to help the Team do epic things that were much more in line with what I should have been doing.

But hey, gotta keep up with the Jones’, right?

So what does my life look like now?

It’s stressful, but we’re going to manage without too much pain. I think I told you all that we finally hit the trigger rate on our mortgage. We had a whopping 67% increase in mortgage payments.

I’ll tell you one thing, not too many people can handle that kind of spike. Can you? Add 67% to your mortgage now and see what your budget looks like. No good, right?

So this is the pain the BoC needs people to feel. But some will lose their homes due to this. And by “lose,” I mean most will just have to sell and move on with their lives. But some will actually lose their homes.

Does the bank want you to lose your home? No, obviously not. But as long as humans won’t listen to the “hey, y’all gotta sit tight and stop spending,” this is what happens.

So as I put the economics degree I got out of a cereal box aside for a moment, I’m just going to be focussed on supply, which presented some good signals this week, by the way.

Will there be another rate hike in Sept? Maybe. Nobody knows.

Will there be another one after that? Maybe. Nobody knows.

Do you buy real estate based on things you cannot predict?

No.

Do you buy real estate to improve your lifestyle?

Yes.

Should you max out on your pre-approval now?

No.

Is it ok to be a buyer and seller in this market?

Yes.

Should you be taking equity out of your house right now to buy an investment property or do a renovation?

Maybe? You thought I was going to say “no”?

Look, most of us should be hoarding cash right now, and those that are cash-heavy are going to be able to take advantage of some opportunities ahead.

When I look at the 55 houses that sold in our urban markets last week, I see that 70% sold with multiple offers and gave the Seller a solid payday.

I see the condo market, despite having added over 500 listings in our urban markets over the past five weeks, holding relatively strong with quick sales.

So despite all of this negativity in the air, successful and positive people are still out there making moves, albeit cautiously.

I have noticed buyers taking a TON more time to make a decision, which is exactly what they should be doing.

But on the flip side, we’re seeing some sellers being way too stubborn and not selling when they have strong offers in front of them.

A great example is this house at 130 Medland in the High Park area. A great old home that was well-maintained on a great lot.

I was listed at just under $1.9mm. They had five offers (we were one of them). I think the top offer was just over $2mm. A great number, all things considered. But the elderly Seller had a different opinion on value.

They wanted more. So they didn’t accept any of them and just relisted the next day for nearly $2.3mm. There are no comparables to justify this $2.3mm. None.

So this seller likely shot themselves in the foot with their ambitious expectations, which went against the advice of all the professionals they had hired to help with this sale.

Another property in High Park on Ellis Ave. Listed for just under $2mm, and I could justify a final price in the mid $2’s. They ended up with no offers and re-listed at a higher price the next day.

Perhaps an overambitious seller again, but this is what the market looks like right now.

We have a mix of reasonable and unreasonable people trying to make things happen out there, and they’re clashing. But most deals are going through, but conversations are different.

The good news is buyers will always be buying, and sellers will always be selling. And The Spring Team has the best trained agents in the industry and we’re best positioned to help people through markets like this.

I take a lot of comfort in that.

Let’s talk about what you want to do. Book a call, you can do that here, and I really look forward to talking.

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!

Urban Markets: Downtown & Surrounding Areas
House Average Price: $1,450,800
House Median Price: $1,355,000
493 Active Listings
55 Firm Sales This Week
Months of Inventory (MoI) 2.27 (down from 2.37 last month)
Average Days on Market 13.53

Condo Average Price: $807,271
Condo Median Price: $692,500
2139 Active Listings
106 Firm Sales This Week
MoI 3.77  (up from  3.16 last month)
Average Days on Market (DOM)  17.38

Urban North: Rosedale, Deer Park, Moore Park, Forest Hill, & Lawrence Park
House Average Price: $2,683,455
House Median Price: $2,72,000
121 Active Listings
6 Firm Sales This Week
MoI 3.15 (down from 3.47 last month)
Average Days on Market ~ 16

Condo Average Price: $1,409,222
Condo Median Price: $952,000
227 Active Listings
9 Firm Sales This Week
MoI 4.01 (up from  3.99 last month)
Average Days on Market ~ 20

Leaside, Davisville, Yonge & Eglinton
House Average Price: $2,240,000
House Median Price: $2,070,000
43 Active Listings
3 Firm Sales This Week
MoI ~ 1.45 (down from 1.57)
Average Days on Market  2

Condo Average Price: $955,250
Condo Media Price: $882,500
163 Active Listings
8 Firm Sales This Week
MoI 2.48 (up from  2.32 last mth)
Average Days on Market ~ 16

Birch Cliff
House Average Price: $1,210,000
House Median Price: $1,210,000
30 Active Listings
2 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: $1,393,333
House Median Price: $1,282,500
93 Active Listings
9 Firm Sales This Week
MoI 2.30 (up from 2.14)
Average Days on Market ~ 11

Condo Average Price: $680,750
Condo Median Price: $657,500
61 Active Listings
6 Firm Sales This Week
MoI 2.36 (down from 2.46)
Average Days on Market ~ 22

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