With the average price of a home in the GTA going up 16.2% year over year and detached homes up 18.9%, buyers are feeling the law of supply and demand.
As great as this is for sellers, the challenge becomes finding their next home. How can you deal with that?
We help our clients negotiate a long closing period with the option to move it up should they find a home and can close earlier as a strategy to mitigate the shortage of homes and length of time it might take to find the right one.
Another strategy that continues to be successful for our clients is finding homes off the market. If you own a home in Toronto you’ve probably gotten a letter from a real estate agent (or 10) saying they have buyers interested in your home. Let’s be honest, a lot of the time this is a tactic to secure listings and the buyers don’t exist.
With our buyers we have literally driven up and down streets taking note of the specific addresses of homes that they want us to approach homeowners on their behalf.
If you get a letter from an agent like this and are actually thinking about selling, ask them for detailed specifics about their buyer – who are they, how long have they been looking, have they bid on other homes, what are they specifically looking for (number of bedrooms, parking etc.) so you can suss out if there is a legitimate buyer.
On a good news note, we are finally seeing more homes come on the market. We can always tell by how full our ‘board’ gets with upcoming listings and it’s getting pretty darn full.
The same thing happened last year where the sales volume was lower due to lack of inventory – the traditional crazy spring market of March and April gets pushed to May and June and even stretches into July (which was our busiest month last year).
Buyers who are set on a detached home are looking further out – east neighbourhoods like the Guild and Cliffcrest are gaining in popularity.
The Richards Group
Toronto Real Estate Board Market Watch
Toronto Real Estate Board President Mark McLean announced that there were 12,085 sales reported through TREB’s MLS® System in April 2016. This result, which represented a record for the month of April, was up by 7.4 per cent in comparison to April 2015.
For the TREB market area as a whole, annual sales growth was experienced for all major home types except semi-detached houses. In the City of Toronto, sales were down for detached and semi-detached houses as well as townhouses on a year-over-year basis. This dip in sales in the ‘416’ area code was due to a lack of low-rise listings. Many would-be buyers were not able to find a home that met their needs.
“While April’s sales result represented a new record for sales, that number could have been even higher if we had benefitted from more supply. In the City of Toronto in particular, some households have chosen not to list their home for sale because of the second substantial Land Transfer Tax and associated administration fee. The lack of available inventory, coupled with record sales, continued to translate into robust annual rates of price growth,” said Mr. McLean.
Home selling prices continued to trend upward in April. The MLS® Home Price Index Composite Benchmark was up by 12.6 per cent year-over-year. The average selling price was up by 16.2 per cent. The higher growth rate reported for the average home price, as compared to the MLS® HPI, points to a greater share of high-end home sales this year compared to last.
“As we move into the busiest time of the year, in terms of sales volume, strong competition between buyers will continue to push home prices higher. A greater supply of listings would certainly be welcome, but we would need to see a number of consecutive months in which listings growth outpaced sales growth before market conditions become more balanced,” said Jason Mercer, TREB’s Director of Market Analysis.
To read the full Toronto Real Estate Board Market Watch click here.