I think the pandemic real estate boom in Toronto can be officially said.
Sure, it's not an easy consensus we've reached, but even the negatives remember what we're seeing now is seasonal slowdowns and long ago. There may be a simple "market readjustment".
The market has almost stopped as sales have fallen off the cliff. The average selling price of some GTA's has fallen by more than 20% from its peak in February. I am neither dramatic nor sensational. That's literally what the data shows.
The only debate at the moment is whether we are in the real estate collapse territory or just in the process of remediation.
Now, given that the definition of real estate collapse is a sudden decline, which results in a loss of value of more than 10% from the peak value of 52 weeks, we are still there for over a year now. Sen-Year Our numbers aren't too bad. But on a monthly basis, there should be no doubt that we are on the verge of a powerful fix.
And given the bubbles of the last few years, no one knows if it's amazing.
But what surprised me was how quickly this happened. Indeed, there have been signs that expectations for interest rate hikes have risen this winter and buyers' sentiment has changed in tandem, but that's not the case.
This is a clear reaction to the Bank of Canada raising interest rates much faster and much more drastically than expected in response to uncontrollable inflation. With the addition of broader economic uncertainty, stock market instability, war in Europe, and reasonable fears of an imminent recession, the sentiment of omnipotent buyers can't be exacerbated any further.
Well, you would expect me to embark on a fuss about how the sky is falling, and we are all destined, but I'm still there plug. But I believe the ones ahead will be a nuisance, and on the other side, it will almost certainly be a near-complete washout of the pandemic's interests in Canadian home prices.
Why. That's because our real estate market is at a point when it's completely free from the similarities in market fundamentals. And given that home prices have risen by 50% across Canada over the last two years, that's going to be a long fall.
But it's also heading towards a well-established downmarket, an area that many remember, but almost certainly feels foreign to a wide range of Canadians. Means.
Buyers will be worried about these new rates, and eventually they will find that the game has changed.
Does anyone in Toronto remember the time before bidding for the war? When it took weeks or months for a great property to still sell. If the market value is based on comparisons and is not established based on what the crazy buyers at the offer table are willing to spend to outperform you.
You say that for every story of blind bidding that drives madness, multiple offers are likely to be an exception, rather than the rules for the coming months. .. It is no exaggeration to say that blind bidding is not the disease itself, but just a symptom.
Sellers accustomed to the driver's seat must accept that this new reality is exactly that and their new reality. February prices are a long time ago. Offers may include terms. And for those who have to sell now, it will be a difficult drug to swallow, especially if they rely on income to close another property.
From now on, the wise move is to almost always sell before thinking about buying.
And for Toronto agents who enjoyed the boom, especially those who were in a hurry to get a license during a pandemic, the business is on the verge of desolation. The best will have to work infinitely hard to compete for part of the business. And those who attend the party hoping to win a quick and easy deal will probably return to their day-to-day work.
Professionalism, ability and ethics mean everything in the coming months and years. And our interrelationships are no more important. I think re-bending the bargaining line is a welcome change. Skills that have become almost verbose when successful in a bid war are now almost entirely dependent on how much the buyer is willing to spend.
Yes, the situation is not good at this point and will almost certainly get worse before it gets better. And for those most likely to be affected, buyers who buy in over the last two years and turn their mortgages upside down for a while, we all work because they hunt down and survive this. You should hope that.
Stop treating real estate like a state religion for everyone else and refocus on what's important.
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