Week 178: No Further Rate Hikes in 2023? Let’s talk about it.

An interesting survey came out last week about what the rest of 2023 might look like

The survey was conducted of all the major banks in the general consensus was that we are done with hikes for 2023

Is that true?

Because a week prior everybody was pretty much pricing in a 50% chance that rates were going to go up another quarter point in September

But based on the conversations out there it sounds like that might be off the Table

Is that possible?

100%

But it’s also possible that we’re surprised with another rate hike so be prepared for that to happen and make sure your preapproval is absolutely locked in. Because let’s not forget that back in April, this same survey revealed the same results and, well, we all know how that turned out.

I’m not quarter point there will push a lot of people into higher mortgage payments that were previously holding on to their fixed payment variable. So if that does happen, it is going to create an immediate selling frenzy play suspect then after a month or so of intense lifting activity, things will calm down

The nanosecond. We have some positive news about rates heading in the opposite direction I don’t see any reason why the market doesn’t heat up again, however, the only unknown here is when rates to start coming down, will people be too traumatized to make any decisions?

Only time will tell, but the lessons learned over the past few years are that patient people always win and jumping on a bandwagon only because everybody else is doing it with no sound decision making involved is probably not the best move forward with a massive financial decision like real estate

So let’s put those egos aside forget about what the “Joneses“ are doing and apply the same critical decision making process, regardless of how slow or fast the market is moving there will always be an opportunity if not now than later

Week 178 is upon us and what do we see? Looks like we see the exact same thing that was happening this time last year but with much lower interest rates and it’s pretty cool to see that I have three years of this data that I’ve been collecting now so if you look back to August 2021, the main change you will see is just how much better condos were selling at that time.

Almost triple the amount of sales in a week and we had this past week which shows you that a lot of the entry-level condo buyers are essentially being priced out by these enormous rate hikes

Margin, having to be approved at North of 8 percent and then landing on a high fiber, low 6% mortgage

Definitely a different landscape out there and people are doing whatever they can to manage their cash flow.

Like we said in the beginning, people are going to sell their cottages and other luxury items before they even think about selling their Toronto real estate

And that’s what’s happening right now. The cottage market is getting slaughtered when it should be absolutely thriving.

What’s really surprising to see or that other luxury items like resale watches Are still doing surprisingly well

But like I said two weeks ago, I feel like it of us reporting on the market really understood how much time it takes before any of these rate changes to actually affect people.

There are going to be a number of people that absolutely need to sell their home over the next few months,

Massive spikes in mortgage payments and banks being a lot more firm and way less flexible on the instruction of the bank of Canada

But the good news is if you look at listing supply you’ll notice that it’s pulling back in all major areas even condos state flat week over week, even though we have nearly 800 more listings on the market now than we did in August 2021 you’ll notice average and median pricing: strong.

so why is the average price of houses so low? Usually around this time of year the urban luxury market and the luxury market across-the-board is fairly inactive so we have much less activity in the higher price points resulting in a lower average price and when you’re working with such small data sets like I am, it’s really not that Important to focus on average price that’s why I never really talk about it but if you’re wondering why it’s two to $400,000 lower than it has been that’s mainly the reason

What should we do now?

Keep doing what you’ve been wanting to if you’re a buyer go out there and buy you’re going to have an easier experience than you would have a couple of months ago that’s for sure, if you have a preapproval in hand and the down payment, all saved up and ready to go make it happen

But if you need to sell your place, make sure you do that before you make any buying decisions because of this market it’s really important to know exactly what you’re working with because things change so fast you don’t wanna be caught with your pants down

No question in this market you must sell first you must make sure you have a locked in preapproval and you fully understand what your carrying costs will be on the new purchase

No matter how strong your relationship is with the bank or your mortgage broker. There are roadblocks all over the place to borrow it right Now.

Anyway, let’s not forget that it is summertime and if you have the ability to enjoy, please do so take your eyes off and you don’t feel like you have to sell because things are changing in the market. Don’t feel like you have to buy because other people are buying don’t feel like you have to take it vantage of opportunities because they exist. Don’t feel like you have to do anything. It’s learned a hard lesson from the FOMO years of Covid

People believe shortsighted and foolish financial decisions because everybody else was under the guise that real estate never goes down and there’s money to be made day after day.

Like I said last week, I made some pretty irrational decisions myself, but luckily I’m in a position where I have great people around me, and I have the ability to deal with those decisions and manage them, but some people aren’t as lucky and they are going to have to decide between having your own place to live or selling some assets at a loss.

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: $1,464,745
House Median Price: $1,387,000
473 Active Listings
42 Firm Sales This Week
Months of Inventory (MoI) 2.27 (down from 2.37 last month)
Average Days on Market 10.60

Condo Average Price: $807,875
Condo Median Price: $725,000
2140 Active Listings
88 Firm Sales This Week
MoI 3.77  (up from  3.16 last month)
Average Days on Market (DOM)  20.46

Urban North: Rosedale, Deer Park, Moore Park, Forest Hill, & Lawrence Park
House Average Price: $2,692,002
House Median Price: $2,300,000
118 Active Listings
9 Firm Sales This Week
MoI 3.15 (down from 3.47 last month)
Average Days on Market ~ 18

Condo Average Price: $1,147,375
Condo Median Price: $765,000
227 Active Listings
8 Firm Sales This Week
MoI 4.01 (up from  3.99 last month)
Average Days on Market ~ 21

Leaside, Davisville, Yonge & Eglinton
House Average Price: $2,157,309
House Median Price: $2,289,000
46 Active Listings
4 Firm Sales This Week
MoI ~ 1.45 (down from 1.57)
Average Days on Market  11

Condo Average Price: $784,878
Condo Media Price: $672,000
160 Active Listings
9 Firm Sales This Week
MoI 2.48 (up from  2.32 last mth)
Average Days on Market ~ 29.33

Birch Cliff
House Average Price: $1,165,022
House Median Price: $1,062,544
31 Active Listings
4 Firm Sales This Week
MoI 1.88 (up from 1.63)
Average Days on Market 35.75

Kingston Rd Corridor to Highland Creek
House Average Price: $1,063,500
House Median Price: $1,001,000
96 Active Listings
8 Firm Sales This Week
MoI 2.30 (up from 2.14)
Average Days on Market 17.13

Condo Average Price: $661,000
Condo Median Price: $661,000
59 Active Listings
2 Firm Sales This Week
MoI 2.36 (down from 2.46)
Average Days on Market ~ 28

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