The summer is usually a quieter time of year for real estate sales.
But this summer feels slower than normal, said Jennifer Scaife, a sales representative at the Desmond Brown Real Estate Team. Buyers are waiting for lower prices, and sellers are only moving if they have to, she said.
“It’s definitely much quieter … than one would expect,” she said.
The slide really began mid-April, said Scaife, when home prices started to go down in a matter of weeks, sending done deals down the drain and prompting sellers and buyers to pause and reassess their plans.
“The buyers, especially, are just much more cautious now,” she said.
Toronto-area home prices have been dropping for several months, and year-over-year real estate sales are down 41 per cent. With an oversized Bank of Canada rate hike around the corner, homeowners who are looking to sell might be wondering if they missed their moment.
John Pasalis, president of real estate brokerage Realosophy, said the latest home price and sales data didn’t come as a surprise.
The combination of high home prices and rapidly rising interest rates has put pressure on some people to sell quickly, especially if they have already bought their next home, he said, driving prices down at a fast pace month over month.
But if you’re feeling the pressure, Royal LePage CEO Phil Soper said it’s important to look at the bigger picture. Most sellers are also planning to buy, he said — so if you’re selling your house for a little less than you planned, you’ll likely be buying your next home for less, too.
“For most people, a correcting market is a good time to sell if they’re moving laterally or they’re moving up,” he said.
But that doesn’t mean now is a time to proceed without caution.
With prices trending down, Soper said conditional offers are becoming more common, and banks may require a second appraisal if your house is on the market for a longer period of time.
In some cases, a second appraisal just a few weeks later can result in a large price drop, said Scaife. This leaves more opportunity for conflict in the sales process.
Even if the paperwork has been signed, people may be pulling out of real estate deals or looking to renegotiate during this downward period, said Soper.
Now that the market is cooling and given the uncertainty, Pasalis said more people will be — and should be — looking to list and sell before they buy.
But don’t rush into a sale if it’s not the right time for you or your family. Scaife said this short-term correction is just that — a dip, a slowdown, but not a cliff.
After all, this is Toronto.
“Toronto is just the market that doesn’t take a hit, really,” said Scaife. While buyers and sellers may be taking this time to reassess, “they’re not frozen still.”
Soper agrees with Scaife: prices can only go so low in a market like Toronto, where demand remains high. Interest rates are still relatively low compared to historical standards, he added, and he doubts they will reach previous highs.
“We’re in a much more stable part of the corrected market now,” he said.
“Prices are dropping rapidly from where they were in February, March. But they’re stabilizing at a lower level because the demand’s still there and the inventory levels haven’t popped.”
Besides, prices are still up year over year, so unless you bought your home at the very top of the market, it’s guaranteed to have appreciated even over a few years, said Pasalis.
“It’s not like we plummeted to pre-pandemic levels,” he said.
It could take a little while for prices to rebound, but Pasalis agrees that Toronto’s imbalanced, expensive market hasn’t fundamentally changed.
“There will be a floor” to this downturn, he said.
The big challenge for many sellers will be letting go of the price they were hoping to sell at, said Pasalis. If you really need to sell, then waiting isn’t the best approach — swallow your disappointment, make your home stand out, and get the best price you can, he said. After all, even if you’ve only owned your home for three or four years, “you’ve still made money.”
So despite the stress and uncertainty, the advice remains the same: if it’s the right time for you, then go ahead and sell.
“It’s been a crazy two and a half years and this is a time period where sober second thought is completely reasonable,” said Soper.
“But the underlying strength of the real estate market, particularly in southern Ontario, has not diminished one little bit.”
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