08 Aug 2023

Week 179: How Unemployment, Rate Changes, and Surprising MoI Trends Shape Your Next Real Estate Move

Week 179: How Unemployment, Rate Changes, and Surprising MoI Trends Shape Your Next Real Estate Move

Canada’s unemployment rate increased for the second month in a row, hitting 5.4% in June, the highest level in over a year.

(check out what was happening last year right here)

Some people might consider this a bad thing, but in this kind of environment, this is the government’s goal, which is what I mean by “creating pain. “

Jobs need to be lost, and people need to be put in challenging financial situations for demand to finally fall off a cliff, not because people choose not to spend but because they cannot.

So when we see unemployment going in “the wrong direction,“ that’s actually a good thing and a sign that the end of all this tightening is near.

And there’s a lot of confusing information about what will happen at next month’s Bank of Canada announcement.

The same publication on July 15 had a headline saying economists believe rates will go up in September. The next day the same publication says, “Nope, looks like they’re not going to go up in September.”

The economist at CIBC are saying one thing the economist at RBC are saying another, and it just feeds the new cycle and gives people something to talk about

One thing’s for sure, and something that it took me a while to figure out, is that nobody knows a damn thing about what’s actually going to happen. Even the Bank of Canada is having fun with it and doing their own survey asking people what they think it’s going to happen, which I find hilarious, and I talked about it in last week’s blog.

Anyway, although lots of people are feeling painting out there, it does seem like people are settling into summer as sales numbers are down across-the-board with no significant activity in any sector we’re following other than typical seasonal sales activity.

However, the months of inventory figures or MOI, which I have listed below, are really important to look at.

So that’s one thing I want to make sure everyone reading this is doing is scrolling all the way to the bottom, where I have the charts I’ve been tracking since March 2020, as well as a snippet of the most essential data for each community.

That information down there is essential because it goes beyond the general data provided by the Toronto Regional Real Estate Board (TRREB) month, so let’s remember that although monthly figures do have their place if you’re an active buyer or seller, weekly reporting is what you need to focus on

So we’re not suddenly surprised by four weeks of data and saying things like, “Oh look, things seem to be slowing down now, “ but of course, we already know that because we’ve been seeing it happen every week.

What’s interesting to see as the months of inventory number is trending down for houses in urban centres, which would explain the competition we’ve been experiencing on some properties

What’s also surprising is that the condo market is not favouring buyers yet even though we’re practically at four months of inventory, which is the highest I’ve seen since the beginning of Covid when people were panicking.

When will the condo buyer market finally show up? Because I can tell you from experience when our clients are making offers on “in-demand “ condo properties in Toronto, with sometimes end up in competition and not having as easy a time as the statistics show

I also wanted to address those praying for market crashes and price adjustments during this time.

How’s your buying going? Taking advantage of all those big deals you thought were on the horizon? How many assignment properties have you bought?

You see, a lot of people wish for these moments, and they want for this pain because they think somehow they’re going to be insulated from the economic trigger that causes the pain so they can take advantage of these depressed prices, but in reality, everyone’s equally as affected so unless you’re sitting on hundreds of thousands of dollars in cash you really can’t take advantage of any of that stuff because you have to borrow at these higher rates so you’re either paying a hefty price with a lower rate or a lower price with a bigger rate.

So hopefully, some of y’all who are cheering from the rooftops for this kind of situation now understand how silly that belief is, but those of you who were serious and can afford to take advantage of some of these opportunities, we should talk because every single day, we are selling clients assignment properties at below the original purchase price from 2018 onward. However, from our experience, most people still don’t think they’re cheap enough.

Anyway, if you are a reasonable buyer, it depends on what you’re buying, but we need to have a sit down before we get started to set the tone for what your experience might look like because if you’re expecting to walk in there and ask for massive six-figure discounts, you’re still going to realize that Toronto sellers are built differently.

So although some of the gains earlier this year have been pulled back already, Toronto is nowhere near affordable, nor will it ever be, so it’s always a good idea to take a look at your financial situation and see if you can get in somewhere on the ladder to let the real estate equity machine start working for you because we’re not gonna be in this down market forever, if you know Toronto, you know that people are obsessed with real estate here.

Prices will pop off again, and they’ll pull back again and pop off again and pull back again, then pop off again.

The trick to success? Be patient and don’t listen to any noise during the ebbs and flows; get yourself into the market, make sure you contribute to a monthly reserve fund in case things go sideways and ride out any storm along the way until you’re ready to retire.

Anyway, I’m going to jump in the lake right now and enjoy this last month of summer; hopefully, you all can do the same. If you want to talk about your situation, we’ve helped many clients escape some seriously sticky situations, so reach out. I’ll assess your situation to see what we can do to help you. We have access to private lenders and all sorts of different financing situations to help you get over some humps right now.

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: $1,470,633
House Median Price: $1,373,500
443 Active Listings
42 Firm Sales This Week
Months of Inventory (MoI) 1.92 – DOWN from 2.27 last month
Average Days on Market (DOM) 12.63

Condo Average Price: $815,160
Condo Median Price: $741,000
2105 Active Listings
78 Firm Sales This Week
MoI 3.91 – UP from  3.77 last month
DoM  22.62

Urban North: Rosedale, Deer Park, Moore Park, Forest Hill, & Lawrence Park
House Average Price: $3,740,000
House Median Price: $3,740,000
119 Active Listings
2 Firm Sales This Week
MoI 2.69 – DOWN from 3.15 last month
DoM ~ 33

Condo Average Price: $1,169,611
Condo Median Price: $1,100,000
215 Active Listings
9 Firm Sales This Week
MoI 3.64 DOWN from 4.01 last month
DoM ~ 35

Leaside, Davisville, Yonge & Eglinton
House Average Price: $1,654,500
House Median Price: $1,654,500
45 Active Listings
2 Firm Sales This Week
MoI ~ 1.59 – UP from 1.45
DoM  3

Condo Average Price: $705,000
Condo Media Price: $672,000
159 Active Listings
9 Firm Sales This Week
MoI 3.04 UP from 2.48 last mth
DoM ~ 20

Birch Cliff
House Average Price: $1,144,950
House Median Price: $1,144,950
28 Active Listings
2 Firm Sales This Week
MoI 1.69 DOWN from 1.88
DoM 25

Kingston Rd Corridor to Highland Creek
House Average Price: $1,058,500
House Median Price: $1,077,500
94 Active Listings
8 Firm Sales This Week
MoI 2.59 UP from 2.30
DoM 8.5

Condo Average Price: $566,250
Condo Median Price: $570,000
58 Active Listings
4 Firm Sales This Week
MoI 2.80 UP from 2.36
DoM ~ 17

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