It could also be the barely disguised frustration of sellers, who listed their homes this spring expecting to attract cut-throat bids from desperate, over-extended purchasers. Instead they are seeing fewer showings and fewer offers.
Toronto area home prices dipped about 7 per cent in May, 2017 compared to April, 2017 but remained about 15 per cent higher over year averaging $863,910.
Even as the market has soared, there were some month-to-month price drops-off, said Jason Mercer, Director of market analysis for the Toronto Real Estate Board( TREB ), which published its month-end May, 2017 statistics on Monday.
December’s median home price was $46,212 lower than November’s $ 776,684 but it is “somewhat unusual” in the peak spring season, he said.
The last year-over-year cost drop-off was 2012, said Mercer.
May’s cool down arrived with a 43 per cent increase in active listings.
But there is no indication thata bubble has burst, he said. That would require some dramatic things altered in the economic environment — a real rise in trending rates or a change in regional employment.
“When you’re looking at still less than two (2) months of inventory and median price growing at just below 15 per cent, that tells me there’s still enough competition out there between buyers to be driving pretty substantial price growth,” he said.
Mercer tells the boost in listings is down to strong prices in the first quarter and the provincial housing policy announced in April, 2017 that have prompted some owners to cash out their equity. That has given buyers “the luxury of being able to take a step back” to see how the foreign customers tax and other government policies work out, he said.
“We’ve entered a period of re-adjustment in price expectations in the market and this causes buyers and sellers to lock horns,” told a housing commentary from RBC Economics Research on Monday that goes on to predict a buyer’s market in the coming months.
“We continue to expect that the next phase in the market is gonna be a soft rather than hard’ ground ,” mentioned RBC.
Buyers have more selection, more time and even a bit more negotiating position. But they should not expect a steal, cautioned one realtor.
“A lot of buyers misunderstand some of the data. They’re thinking there’s some sort of crash, some sort of huge buying possibility. There is an opportunity to buy with much less rivalry but there surely isn’t an opportunity to buy at a major discount,” mentioned Mamourian, broker.
He has determined evidence of the nearly 20 per cent of the numbers drop in the number of sales over a year as identified by TREB. The transformation presents a psychological impediment for a lot of sellers.
“The main part of advice we’re giving sellers is ‘Make sure we sell first before you buy.’ That was the opposite advice “we were” giving in the first quarter,” he said. “You’d make sure you buy first only to make sure you don’t get stuck homeless — now 100 per cent of the times you’re selling first. “He’s also suggesting sellers a “worst-case scenario” sale price to make sure they don’t over-leverage themselves on their next purchase.
Some sellers who bought a few weeks ago could be possibly panicking, but most sellers are the ones who decided to sell if they get a sufficiently high price. “It doesn’t matter if they sell or not,” told agent Mr. Brown.
He is among the agents who have lost listings because they were not recommending prices that met sellers’ higher exppectations, many of which were based on first-quarter sales when prices increased at 33 per cent over a year in March, 2016.
Those kind of growths are not sustainable, he told. The new normal is really on the age-old normal.
“I genuinely welcome the market we are having right now,,” he said. “There was a day when people decided we need a bigger house so we are going to sell this spring and move up to a bigger house. For the last few years a lot of people were not cpable of doing so and now they can.”
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Source: Toronto Star
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