Rates are up, sales are down and buyers & sellers are uncertain: June 2022 Market Update
Rates are up, sales are down and buyers & sellers are uncertain. The Toronto Real Estate Board has provided their June report, and we have some important takeaways to share.
👋Ready? Here’s the big news: we are in double-digit sales drops - sales are down 12.5% from last month, and 41% from last year.
Before we panic, some things to keep in perspective: 1️⃣ we typically see a slight dip from May to June annually (hello, cottage season!) and 2️⃣ last year we were in an unprecedented boom.
The interest rate changes, combined with buyer fatigue, certainly is playing a huge factor here.
💰Prices actually dropped a bit from last month; a product of supply and demand. In June, we saw 6,474 sales and 16,347 new listings. As such, the average price across all home types now sits at $1,146,254 (keep in mind, this is still up 5.3% from last year).
There is an undeniable slowdown in activity - with a property taking about 24 days to sell (including if it is re-listed). The number of active listings in June was 16,093. This is a 42.5% increase from June 2021. Buyers have more options, creating less competition
With an increase in rates, buying power is reduced. Lower price point segments (think condos and townhomes) are benefiting from this, and showing the highest % of sales growth.📈
We will answer this, but remember that those are questions everyone is asking right now, and a lot of it is speculative and a psychological effect that has caused this market to slow down. The “wait and see” mentality is going to cause less sellers to list and tighten inventory.🤷♀️
Sellers know this: the same listing that would have sold last year in a week, may take a few weeks. The difference maker now is truly the sales and marketing strategy. This is not a drill - who you hire will make a significant impact on your final price and length on market, and more importantly will be knowledgeable about your market to ensure your expectations are exactly where they should be. The first impression of a buyer, how it looks, what it's priced at and how they come to hear about your property will ensure you have a successful sale.🏡
👀Buyers looking for a “deal” or a “crash” have to keep in mind that we have a strong ecosystem that will support the Real Estate Market in Toronto with high employment, immigration and low supply. While we are welcoming the post-covid correction, overall pricing is not dropping - just the competition. We remind you to think about your objective - buying real estate is a long term play, and as the old adage goes “buy real estate and wait” (DM for facts and figures that genuinely support this).🤓