In a seller’s market, the home seller always wins, but times have changed and although we haven’t necessarily shifted into a buyer’s market, there are big benefits for today’s buyer. The question is, have we hit rock bottom or are further home price drops inevitable?

The reality is, timing the Toronto real estate market perfectly is virtually impossible. Even though we have been in a heated seller’s market for years, we do actually see small yearly fluctuations, often not talked about or misreported by the media. The current market downturn definitely feels more like a market bust that will take longer to recover.  Prices have dropped by 15-20% in many Toronto neighbourhoods. This doesn’t necessarily mean prices will continue to drop.

Have we already hit the bottom? If not, perhaps we aren’t too far from it and a flatline of prices is in our future. If interest rates continue to rise into 2023 and prices flatline vs a further decline, waiting on the sidelines for a further price drop will ultimately cost you more money when your existing rate lock expires.

Looking for more info on the Toronto real estate market? Read market update blog right here.

The market conditions right now are optimal for home buyers.

If you are a first-time buyer, or even a move-up buyer, securing your next home is easier than it’s been for years. Even though monthly mortgage payments have gone up and budgets have shifted, home prices are down by 15-20% in some parts of the city and there are some seriously great buying opportunities out there.  Buyers have more control over closing timelines, conditions in their offer ⁠and transparent pricing strategies.  There are fewer multiple offers and more “buy it now” prices. Plus, there are obviously fewer buyers actively shopping for homes which makes the buying process more tolerable, less daunting and faster (big bonus!)⁠.

In a robust and fast-paced real estate market like Toronto, taking advantage of market fluctuations will mean the difference between a missed opportunity and a great score! In theory, waiting for the lowest of the low is great, but there are risks involved. When market conditions aren’t favourable, more sellers pull back and inventory diminishes. This could also mean more buyers and property investors will come back into the mix to try to snap up hot deals before it’s too late. In our opinion, the optimal time to aggressively shop for a home is now. We are in a market that could potentially see a little more of a downturn, but this will ultimately leave you vulnerable to even less inventory, more competition and higher interest rates.

Are you thinking about buying a home soon? Check out these other great resources to get started:

• The Cost of Buying a Home in Toronto
• Key Steps to Buying a Home in Toronto
• Hiring the Right Realtor: Questions You Should Be Asking

If you are a home buyer who has to sell a home, take your time and evaluate which one of these tasks will be more difficult to manage and take on the hardest one first.  For example, if you have a home to sell that has some challenges or quirks, in a changing market, this could mean a much lower price and significantly longer days on market.  Therefore, you should probably tackle the sale of your home first. If the next home you are looking for is a unique ‘needle in a haystack’ type of home and your existing home is classified as a typically desirable home, it’s probably best to hold off on selling until you find that truly unique next home. This will ensure you aren’t under pressure to buy or compromising on important wants because your existing home has sold. A word of caution: every seller needs to adjust their pricing expectations and when we say prices have dropped by about 15-20% from February, we truly mean it. Your house will not sell this fall for what your neighbour may have sold earlier this year. Of course, this price correction will vary based on the location and accessibility of your neighbourhood.

Buyer confidence translates into higher prices.

This is particularly true in Toronto when buyer confidence and the need or want to own your own home drives prices higher. You always want something you can’t have. I mean not always, but you know what we’re referring to. This is the other version of supply and demand.

Right now, supply is low, because it’s always low in Toronto, and demand is lower than usual. Can you guess what will happen when demand goes back to the levels we have experienced over the last several years? This isn’t a question of if, but rather a question of when. We aren’t saying that this will happen overnight as prices need to stabilize and we all need time to adjust to the higher interest rates. We are simply saying that if this happens faster then we expect, buyer demand will grow once more and prices will start to rise. A more balanced market is good for everyone. Home prices won’t rise overnight and most likely not at the levels we have seen, but wouldn’t it be better to buy a home now when there’s less stress and less competition?

Remember, timing the Toronto real estate market perfectly is virtually impossible. Taking advantage of downturns is.

Do you have more questions about the Toronto real estate market? Call us at 416-909-1602 or email hello@getnested.ca. We’re always happy to help!

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