The fall market is now in full swing and I’m being asked many questions about real estate, prices, borrowing costs, and more. After the strong run we’ve experienced, I’m not surprised by the decline in activity. I’ve said many times that the pace of sales and rapid price appreciation was unsustainable.
Now that we’ve had some time to adjust to interest rates hikes and a slower sales cycles, we are beginning to see some stalemates at the negotiating table as buyers and sellers continue to exhibit tremendous patience. A home comes to market, a buyer submits an offer below list, the seller signs back in the middle, and the buyer walks. One-and-done offers, with no interest in a negotiation. So, as a result, sellers are choosing to wait unless they must sell.
Now, none of us know the future. In three months, that same buyer may be regretting the hard stance they took, or the seller may regret passing on what was a firm offer. We can only know where we’ve been and where we are today. So, with that in mind, here are some trends to be aware of:
- March 2022 marked the first of five months of average price declines. This situation ended in August, and since then, the average sales price in the GTA has been increasing slightly.
- At the end of September, housing inventory was 2.69 months. This is not an abundant supply, and we have simply not seen a surge in housing inventory to go alongside the decline in sales volume.
- The bulk of sales takes place between $600,000 and $1,500,000. Since June, roughly 75% of all sales have occurred in this price range.
- Homes over $2,000,000 are accounting for a smaller percentage of the sales mix. In February, homes over $2M made up 12% of all sales. In September, they represented less than 6%.
- Despite a drop in sales volume for luxury homes, prices are holding. This sub-market is less sensitive to interest rates. For homes that sold for $3,000,000 or more, the average sale price, median sales price, and ‘sale to list price ratio’ have been fairly consistent since March.
Harvey Kalles Real Estate Ltd., Brokerage, has been in business since 1957, and we bring a wealth of experience to fluctuating markets. If you would like further clarity about the current real estate market, please feel free to call me at 416.723.2383. I will be happy to answer any of your questions, and I can connect you with a member of our sales team that specializes in your area of interest.