Toronto Real Estate Forecast - Summer 2010

Just take a drive around Riverdale, Leaside, Leslieville and East York and you can’t miss the “for sale” signs that have sprung up the past month or so.

Toronto’s real estate market has been “hot” for over 18 months with fairly limited inventory, making it a very attractive market for sellers.   But with this notable increase in quality properties for sale it appears that it is the buyers who may be reaping the rewards this summer.

Typically listings begin to ramp up in the early spring with sellers counting on attractive gardens and summer landscaping to help increase the sale price of their homes.  But, while in past years, we’ve been able to accurately predict home sales trends, activity in just the past six to eight weeks has changed all of that.  There has been a large increase in inventory with some listings sparking bidding wars while, just a few blocks away, homes that would have predictably sold at a premium are sitting there for weeks, if not months, without generating much interest at all.

And Toronto developers continue to ramp up the home and condo inventory.  This might not be a good thing as we still had excess inventory from the overbuilding of the early 2000’s.  The new building boom might just be adding more unneeded inventory to an already over stocked city.  

Many first-time buyers are trying to get into the market while they can still afford to do so, before increased mortgage rates take them out of the running, while many pre-approved buyers are anxious to buy their homes before their financing offer expires.

So with a drastic increase in inventory and the threat of increasing mortgage rates scaring off some potential buyers sellers are coming to realize that their homes might not sell in the same price range that their neighbours got for their homes just two or three months ago.

If you’re trying to sell your home it is important that you consider this increased inventory and the mortgage situation and then work with your realtor to come up with a realistic price.  Unlike three months ago, overpricing your property will not automatically lead to a bidding war. It could mean your home sits on the market for months as potential buyers look to more attractively priced homes just around the corner. 

If you’re looking to buy a home in downtown Toronto, things are really looking up.  There are plenty of great affordable properties out there – newly built or older, single dwelling, semi-detached and condominiums – in some of Toronto’s most desirable neighbourhoods. Sellers realize that they have to take a serious look at each offer as it comes in.  Those sellers, who sit on your early offer, waiting for a more attractive bid, are starting to find themselves out of luck.  Buyers are optimistic now. They realize if they put in a reasonable offer, with their financing already lined up, that sellers are more open to taking that bid immediately, for fear of losing out altogether.

We believe what we have here is a “win-win” situation.  Sellers should be happy to note that there is still a huge demand for attractive, well kept properties and buyers should be pleased that they now have a realistic chance of finding an affordable home, in a great neighbourhood, for themselves and their families.