Toronto’s Housing Market Expect a Changing Wind For 2013

In the last 3 months of 2012 there was definitely a cautiousness in our Toronto real estate market.  Sellers experienced something in the fall market which had not been seen in years… a real shortage of buyers.  For those selling in the last quarter of 2012 most found weeks pass without getting a single showing.  Definitely, not what sellers had experienced in fall markets of years past.

What’s Up? Housing sales for the month of November were down 16% over the same period last year and the GTA condominium market was down a whopping 25%.  Much of this buyer inertia  was certainly in response to Jim Flaherty’s tightening mortgage lending rules in September.  Buyers are now more cautious than ever so lets look at the present Toronto housing landscape:

  • We now have a smaller pool of qualified buyers
  • Home debt levels (through continued refinancing) is at a record high
  • Number of  listings are down as well those sold
  • Traditional homes prices holding their value while resale condominium prices soften

It is predicted that we will be moving into a balanced housing market position for the first 6 months of 2013 if not longer.  Those Toronto home owners who will be putting their houses up for sale will need to take a realistic look at this shift in the market.  If sellers stick to previous cycles they are going to face months of frustration as their homes languish waiting for a buyer.  The market has changed and savvy sellers have to strategically identify who their buyers are and price their home at fair market value.

So what’s in the future?

  • The days of multiple offers will be the exception not the given
  • One on one buyer and seller negotiations, with both parties working to a mutually acceptable agreement
  • Buyer conditions will once more be an integral part of any purchase
  • Old school realtors who think planting a for sale sign is the road to a sale will be in for a sobering shock

Now there will be no massive price corrections as even now most housing prices continue to hold their value.    Yes, the resale condominium market has certainly seen a price drop but that topic is for a blog post in early 2013.

Like most of you, I will be taking some time off for the holidays but will be back to work on December 27.  I have in previous years made some great deals for my buyers just prior to the New Year, so while other Realtors party on it’s back to work for me.

Happy holidays.