The Toronto condo market is hot right now. No seriously, it is.
After months of writing to my readers about how slow the market has been, there has been a fundamental shift in the marketplace over the past 4 weeks. Multiple offers are back with a vengeance. The best properties are selling over asking and in less than 1 week. Buyers are feeling the pinch and I am starting to get used to the phrase ‘sorry, that property is sold’ when I go to book appointments for my buyer-clients.
The stats for April should be released by the Toronto Real Estate Board any day now, and they will almost certainly reveal that sales are up and prices are up beyond what anyone was anticipating for this month.
Why? What happened? Has Barrack Obama worked some kind of magical spell over our economy? Are things not nearly as bad as everyone thinks they are? Are we all just living in denial and making things worse on ourselves by buying up all this real estate?
My thoughts on what has caused this recent upswing in the market:
- Affordability. Prices have come down about 10% overall since the peak about a year ago. Interest rates have been basically cut in half since about 18 months ago.
- Spring Fever. Every year at this time the market is at its hottest. This is always the busy season, so in that sense this upswing shouldn’t surprise us.
- Changing Attitudes. Sellers are more realistic on their asking prices, and buyers are more aggressive as many have been waiting to buy for 6 months or more.
- Canadian Pride. People are starting to see and believe that maybe it’s true – things here in Canada are not nearly as bad as they are in the rest of the world. Where is the best place for your money to be long-term? Many are thinking once again the answer is real estate.
- The Investor Equation. For the past couple years, it was very difficult to find a cash-flow positive condo in Toronto with 25% down. Now, due to lowered interest rates and lowered prices, with rents staying pretty flat, it is.
All this is leading many people to wonder if the bottom of the market was back in January or February. Certainly there were some great bargains had during those months compared to what we are seeing today.
What are your thoughts? Contact me or leave a comment.
May 25th, 2009 at 9:33 am
It was only last week that I read that the condo market had turned around in Toronto. Is it just the condo market, or do you see the same trend in the remainder of the residential market?
My step son had just written his real estate license in Toronto last fall. It was such a difficult time to start in the business he decided to come back to NL and work as a buyer’s agent with me. He’s doing well but I know he’d rather work in Toronto.
May 25th, 2009 at 9:38 am
Hi Larry,
It’s the entire market. There is a major shortage of good product on the market right now. Sellers think it’s a bad time to sell so people are holding back. Meanwhile the demand is still strong and buyers are fighting for the scraps.