How’s the Real Estate Market? May 2019 Edition

2019 has been a bit of a wild, unpredictable ride, and April was no exception. Some weeks, we found ourselves in constant bidding wars, and the next, well, let’s just say there were opportunities for Buyers and properties were not selling as fast as we thought they would.

Officially, the stats tell us:

• The number of sales, in both the 416 and 905 regions were up significantly. Yay!
• Prices in Toronto: Condos saw a 5.8% increase, semi-detached houses a 2.9% increase, townhouses a 4.7% decrease and detached house prices were the same as 2018.
• Prices in the 905 region: Detached house prices were down 1.7%, with condos up 5.7%, semis up 5.1% and townhouses up 3.7%.

When we break up the stats and focus on central Toronto, it’s still a weird and inconsistent story. Some prices up, some prices down:

So what do the April 2019 statistics tell us?

Pretty much the same thing we’re seeing from the street: unpredictable and inconsistent market behaviour. Is this a hangover from the stress test? Are Buyers not feeling a sense of urgency because of the crappy weather?

We’ve seen our own Buyers go in and out of the market repeatedly this spring, missing some excellent opportunities during their ‘off’ periods. Some of our Sellers have been surprised that their homes didn’t get as many showings as they expected, or offers weren’t as high as they’d hoped.

April was weird.

So what should you do?

1. If you’re buying AND selling in this market, strongly consider selling first. Maybe you’ll be one of the lucky ones who gets ten offers and 300K over asking, but you could also be one of the Sellers who doesn’t get any offers after ten days. Knowing exactly how much your home will sell for – and how long it will take – can save you a ton of grief. As always, there are circumstances where buying first still makes sense, so talk to your REALTOR.
2. Hot homes in hot locations are still getting multiple offers, so if you find yourself in a bidding war, you need to be in it to win it. There are still plenty of homes selling for hundreds of thousands over the asking price. Knowing the comparable sales – and understanding what they mean are critical. You don’t want to overpay, but you probably don’t want to lose a house by underbidding because you didn’t understand how much it was really worth. Asking price is usually not very indicative of value if there’s a ‘bidding war’ date.
3. If you’re selling, be smart. Invest in staging and hire a REALTOR who knows how to market a property; this is not the time to just put a home on the MLS and pray that Buyers see it. Recognize that this isn’t 2017 and a more balanced market means you can’t get greedy.
4. If you’re a first-time Buyer, there are some great opportunities for you out there. If you’re ‘on a break’, you may want to reconsider and dive back in.

So what’s the deal with the 905?

Although sales were up substantially in the 905 based in April, the market stats show prices down for detached homes in the 905 region (with all other home types seeing a price increase). This information may come as a shock to current home Buyers in certain areas of the 905, ie. Mississauga (who actually saw an increase in the average detached home price from last year). There are a few things to keep in mind when looking at the 905 stats:

1. More sales of lower priced homes versus higher priced homes skews the average price. The luxury market across Toronto and the GTA haven’t been as active as usual, and the stress test (which reduced the amount of financing a Buyer could qualify for) has pushed Buyers into lower-priced homes. We’re still seeing an extremely active market in the lower and mid-price ranges.
2. The “905” includes York Region, Peel Region, Durham Region, Halton, and there are definite variances when comparing statistics in those regions and the micro/neighbourhoods within them. For example, Mississauga saw a slight increase in the average price, while Markham experienced a ~2.7% decrease over the same time period.

Anecdotally I have seen a push to buy an “affordable home” in the Mississauga region – which I believe is why condos are leading the way for price appreciation in the 905 (5.7% year-over-year increase). Space (that four-bedroom-home with a sprawling yard) isn’t always the number one reason first-time Buyers move to the 905; often, it’s just about getting into the market.

What does this mean for home sales in the 905?

Properties in the GTA that are close to transit with easy accessibility to the downtown core and an affordable price point are in demand for many would-be-Toronto-Buyers looking for a little more bang for their buck. We can see this in the price increase for condos in the 905, and the semi-detached homes right behind them at a 5.5% year-over-year increase and an almost 30% increase in the number of sales.

One neighbourhood in the west GTA that is super hot right now, with easy commutes to the downtown core (~25 minutes to Union Station via transit) is Clarkson Village. Clarkson saw an 8.5% increase in the average price over last year – and for good reason: this little neighbourhood is on the rise with properties suitable to first-time-Buyers, move-up-Buyers, and downsizers alike. It sits on one of the most serviced Go Train Lines, is rife with history and character, and has a real neighbourhood type feel.