I Beleve It's The New Normal: It's a Buyer's Market. And..., is the Buyer's Market actually coming to a close? Some say yes. Why?
Historically, in Toronto, periods which have seemed favorable for buyers have been notoriously and extremely short-lived and the reversion back to "normal" has occurred abruptly. The reasons for those quick turnarounds were unique to the times; likewise, the reasons for the impending turnaround will be as well. But what will those reasons be?
In the past buyers who patiently waited for "the bottom" missed out. Ironically, that same mind set is eerily familiar among buyers today. Combine that with the mindset of sellers who are simply mis-priced (overpriced) and then you can define the sluggish deal volume and poor sentiment we have been experiencing. That said, deals are happening. More and more sellers are understanding and accepting the new reality, which means they must demonstrate value. Prices are down. The sellers who got the memo are getting their properties into contract and moving on. As this trend continues the marketplace will gain momentum with increased deal volume. Further, the data from the most recent sold and closed properties are consistently trickling in and they are lower than before. These are now facts that sellers cannot ignore. The lower prices will generate activity and competition.
Also, interest rates remain relatively low; the 30 year fixed mortgage is currently hovering between 3.3 - 4.5%. Consider that rates were at 6.5% just 20 years ago.*
Right now, these low rates give buyers tremendous purchasing power. Generally, Torontonians cannot sit on the sidelines forever. We are movers and shakers and life simply needs to move along and people will begin to just "get on with it." Again, this will generate activity and competition.
Whereas there is a glut of inventory, primarily in new construction, it is methodically being absorbed. By and large, absorption rates have increased over the past year; I anticipate these figures will begin to tighten come February and March. Again, properties are transacting and buyers are getting significant discounts now. As one of my respected industry colleagues mentioned to me, "Luxury is on Sale." And that means value...
It truly feels as if the market is laying the foundation of "the bottom". That does not mean that buying opportunities have, or will, disappear; to the contrary, there are ample deals to be made. It is simply that the direction we have been heading in is priming itself for a turnaround sooner, rather than later.
Adding to the market malaise is the holiday season; so right now, the negative circumstances are even more exaggerated. This will pass in a mere few weeks and a renewed sense of opportunity will again emerge. Deal volume will increase and so will the sentiment, followed by the competitiveness for good properties. If you are sincerely interested in getting yours, well then, you need to sort .
Are you prepared to dive in? You should always know what you are in a position to buy or sell at all times. If you don't know, reacquaint yourself with the marketplace. What is your property worth? What can you afford to buy? Anyone interested in buying or selling, should be rolling up their sleeves to determine whether the time is right to sell or if there's a home or investment property out there for them. Note: I am here to help you maneuver this process.
Your best investment is often in the broker you choose. With Toronto's palpable level of competitiveness, my clients have considered me their hidden-hand. My experience affords me the expertise to pull back the curtain and reveal the circumstances as they are and the possibilities that exist.