The Morning Meeting. The Fall Market.
Every so often it is important to let the experts talk so at this morning’s meeting I invited a panel of some of our top agents to talk about the Fall Market. These are agents that are out in the field “all day everyday” and because of that, they bring a unique perspective to our business. While we are constantly bombarded with reports from banks, and stories from the media, the truest picture of the Market comes from those who excel in the Market. Here were some of the most interesting comments of the morning;
Most agreed that July and August had all the earmarking of a traditional Summer Market. It was a little slower than usual but that is a good thing as it gave them and their clients an opportunity to step away from the insanity that has been the last few years of the Toronto real estate market.
While the Spring tends to be a busier market than the Fall, they all agreed that the Spring Market is more volatile. There can be bigger gains but there also can be bigger disappointments. They felt that traditionally there is a better quality of homes in the fall.
They still feel like there is still lots of demand and as a result they are urging their clients to hold back on offers again, if only to give their listings more exposure to the market. The panel agreed that Buyers return to the market before Sellers. The general consensus was that it will continue to be a Seller’s Market for homes but a Buyer’s Market for condominiums.
Renovated homes remain the most popular. Financing issues, potential market uncertainty, land transfer fees, cost of trades and materials, and the high cost of raw product is making flipping homes less of a sure money-maker and as a result many contractors are temporarily sitting out of the market.
Agents are asking their Buyers much tougher qualifying questions. For first time Buyers, it is clear that the parents are taking a much more involved role in the home buying role process.Not only are they being more diligent in checking financing they are reviewing approval letters or asking clients to speak directly to their own mortgage brokers.
Pricing homes is getting more difficult. Homes that sold in the Spring are not good comparables yet with a real lack of houses available for sale, prices will continue to rise. Look for October to be a break out month for homes sales.
The panel categorically agreed that Toronto is a market unto itself. You only have to look at the stability of markets like New York and San Francisco, who weathered the most significant housing crisis, to realize that what happens across Canada has little bearing on the Toronto market. Furthermore the downtown core is a much more stable than other parts of the GTA. They have noticed a changing lifestyle downtown. Parking does not seem as important to people anymore. People are getting rid of the cars, opting instead for car sharing programs, public transit and biking.
Emerging neighborhoods are offering some great opportunities and excellent values. For our West-enders, they see hot spots in W02 and W06 as well as New Toronto, Long Branch and Mimico.
The panel agreed that, for the most part, the higher end of the market, homes over $1.8m, will take longer to sell. The $500k to $800k will continue to be the sweet spot for the downtown market. Good well maintained income properties, 3 to 5 units will be the segment under the most demand.
While the panel hopes for a more balanced market they don’t see that happening over the near term. They stressed that pricing a home is still one of the toughest challenges. It is important to recognize that the market doesn’t lie. You cannot artificially set a price for a home therefore Sellers and Buyers need be well-informed on the neighborhoods they want to buy in.
Ultimately, their advice to the agents in the room was to listen more carefully to what your clients need, know your product, know your client and know your neighbourhood. All great comments and advise from a professional panel. I hope everyone reading this will agree that the best information available comes from the people who are working in the field everyday and not the analysts who publish monthly graphs and charts.