Strong Seller's Market north of Toronto!
Real Estate is making my head spin. No really. The shift of the volatile market swing, not only from month to month but also from area to area, and from price point to price point, is stunning.
The other day, I was in Keswick showing properties. My clients decided they'd like to make an offer on a three bedroom townhouse with one car garage and finished basement. It was listed at $569,900. Two other townhouses on the street sold this past November for $565,000, and for $605,000. While our offer house was nice, the shingles & furnace were 20 years old and would need replacing/repairing within a short period.
Offers for this house were held for four days in order to elicit as many interested buyers as possible. It's a strategy that's really key for sellers getting top dollar from bidding wars. On offer day, we were informed that there would be 12 offers in total. My clients were prepared. They made a strong offer above asking price and without any conditions. Unfortunately, ours was not the winning bid. The winning bid….wait for it…was $650,000. For a so-so townhouse on a so-so street and in need of repair, someone paid 8-15% above what the market tolerated just two months prior.
Will this trend last?
Multitudes of condos in Toronto flooded the market during the spring of 2020 because of the virus. Panicked people ran to outside the city, while self-made landlords found themselves with empty units that were un-rentable by Airbnb. For the first time in a number of years, Toronto renters had their pick of vacant units. Rental prices dropped and the number of condo sales also dropped significantly.
That changed in December 2020. The buyers came back and bought at a discount. Here's a look at how the Toronto condo sales (not prices) changed from month to month in 2020 vs the year before, courtesy of greaterfool.ca. I'm sharing this information with you because it shows a strong shift in the trend and now that there's a vaccine out, people are regaining confidence in city life.
June = -13.6%
July = +4.7%
August = +9.2%
September = +7%
October = -8.5%
November = +0.8%
December = +75.9%
What this shift will do to Real Estate north of the city, I don't know. With respect to 2021 predictions, I sit safely within the parameters of 'it's going to keep going up or it's going to crash'.
RE/MAX (see their cool chart below) and Royal Lepage, both in the Real Estate Industry, predict a modest increase, while Investment groups like Motley Fool and Greater Fool predict a decline in prices.
And we haven't even broached the topics of the impact of interest rate changes, unemployment, or a third wave. Saving that for another day.