As August wraps up the summer months, the real estate market typically slows down, with people focused on family vacations and time off. However, this August, the Greater Toronto Area (GTA) market showed signs of stabilization, even though new listings have declined, and prices remain sticky. While it is still a buyer’s market, prices have only been dropping very slowly.
Looking Ahead to September
With September marking the start of the fall market, people return to their routines and often restart their home search, this is historically the second uptick in activity. This period will give us a clearer picture of how the market will respond with the 3 straight interest rate drops and monitor the progress through the remainder of the year.
A key metric to watch is the Months of Inventory (MOI), which indicates how competitive the market is. Currently, the MOI is 4.55 for all homes and 4.03 for low-rise homes. The lower the MOI, the more competitive the market. If sales start outpacing new listings, the MOI will drop, putting upward pressure on prices, potentially leading to price increases. A balanced market is between 5-6 MOI. To give you some perspective, when the market was at its peak in 2021/2022, the MOI was under 1.
On the Ground: What I’m Seeing
In real-time, I’m seeing more listings holding offers. Some are priced low, hoping to spark bidding wars, and while a few do get multiple offers (2-4 in some cases), they aren’t always selling for extravagant amounts over asking or breaking records. In fact, some are selling for less than what the sellers hoped for, despite the bidding environment. Asking prices are also all over the place. Some sellers are still over valuing their properties while others are pricing it low with a high expectation.
It’s hard to predict the market—it’s close to impossible. Many people ask whether they should wait or act now, and my advice is always: “See what opportunities are optimal for your situation.” Everyone’s circumstances are different.
The Condo and Low-Rise Markets: A Divergence
I believe the condo market will remain challenging, as many investors are pulling out there is an oversupply of listings, and even the expected interest rate cuts, it may not be enough to bring them back. Having said that, condos are still selling, they just need to be priced right, presented in its best light and marketed to the right buyers. In contrast, I see the low-rise home market becoming busier, with competition likely increasing. If you’re thinking about upsizing, you might want to take the jump now before low rise prices pick up and potentially get out of reach when the market fully rebounds sooner than the condo market.
Rental Market Softening
On the rental side, the market has weakened, with rent prices now nearing 2022 levels. They’re expected to drop further due to a combination of seasonal factors and market conditions. This could be an opportunity for renters who’ve been struggling with high rents in recent months.
New Construction Sales: Weak, but Completions Surge
New construction sales have consistently been weak, but housing starts surged unexpectedly in July, exceeding historical averages. With record-high housing completions expected to continue, we’ll be watching how this impacts the market in the coming months.
Making Your Next Move
Everyone’s housing needs are different, and your goals are unique. Whether you’re buying, selling, or renting, navigating these market conditions can be challenging. The best way to make informed decisions is to consult with a knowledgeable realtor who understands your situation.
If you’re considering a move, feel free to reach out to me via phone or email. Together, we can strategize and make the best decisions in these shifting times.
Email or call us to get insights on your neighbourhood stats or an up-to-date appraisal of your home.
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