As the Toronto-area real estate market settles into mid-November, signs are emerging that buyers and sellers are drifting away.
“I feel the market has been calming down recently,” says Boris Kholodov, an agent with Johnston & Daniel, a division of Royal LePage Real Estate Services Ltd.
An unseasonably-early winter snowstorm in the Greater Toronto Area didn’t help, he adds.
“When it’s so dark at 5 p.m., people are reluctant to go and see properties or have showings. The snow makes it difficult as well,” Mr.Kholodov says. “At the end of the day, buying a house is an emotional decision and emotions are impacted by the weather.”
Mr. Kholodov adds that when sellers make fewer listings available, a chain reaction takes place as there are fewer buyers who list their existing properties in turn.
Nationally, Canada’s real estate market flattened out in October after seven straight months of gaining ground.
The Canadian Real Estate Association (CREA) reported last week that sales were unchanged in October from September.
Compared with October of 2018, sales jumped 12.9 per cent across Canada last month.
Sales activity is now almost 20 per cent above the six-year low reached in February, 2019 but remains seven per cent below the frantic pace reached in 2016 and 2017, CREA says.
Lackluster results in central Toronto dragged down the national average, while the surrounding Greater Toronto Area and Hamilton-Burlington also hit a soft patch, CREA says.
The Greater Vancouver Area, meanwhile, saw a comeback in sales.
The national average price in October was $525,000, up 5.8 per cent from the same month last year.
“It’s a full-blown buyer’s market, or on the cusp of one, in a number of housing markets across the Prairies and in Newfoundland,” says Gregory Klump, chief economist at CREA.
Mr. Klump says the mortgage “stress test” has contributed to that dynamic by reducing the number of competing buyers who can qualify for mortgage financing.
In January, 2018, the Office of the Superintendent of Financial Institutions introduced a set of regulations designed to ensure sure that borrowers can afford to repay a mortgage if interest rates rise.
The number of newly listed properties dipped 1.8 per cent in October compared with the same month last year.
Mr. Klump says the Greater Toronto Area remains in balanced territory.
Agents say the market typically winds down in late November as buyers and sellers prepare for the holiday season.
Mr. Kholodov is already hearing from some sellers who want his guidance on listing a property for sale in 2020. Mr. Kholodov believes most sellers will benefit from a spring bounce.
“I’m advising most people to hold off,” he says. “I do expect the market to revive itself in February, which happens almost every year.”
Mr. Kholodov mainly works in the market above $2-million in central Toronto. That slice of the market is dominated by buyers looking for a family home, he says, and therefore tied to the school calendar.
Mr. Kholodov says some homeowners in neighbourhoods such as Summerhill and Yorkville are contacting him now because they want to start fixing up their houses for sale.
“Now they call me months ahead. They want advice on timing and the preparation of the property for the market.”
Mr. Kholodov says most buyers these days want a house to be move-in ready. Sellers who want to attract top buyers – and top dollar – need to ensure the property is renovated, stylish and worry-free.
“That requires a lot of lead time so sometimes we start planning their moves months ahead.”
Mr. Kholodov adds that some sellers are developers who have built a new infill house. In some cases, they are pulling existing listings or holding off on listing recently-completed projects because they expect more buyers and higher prices in the spring.
Sometimes even the expense of carrying the property over the winter leads to a better final result than selling in the winter, he says.
Still, the market has been unpredictable lately, he cautions, and the outlook for the spring in uncertain.
“We don’t know if there will be the oceans of buyers we usually get.”
Mr. Kholodov has strategically listed one property in recent days because it doesn’t fit the mold of a traditional family home.
He’s marketing the four-bedroom house at 29 Edmund Ave. in Toronto’s South Hill neighbourhood as a “blank slate.” The property is being sold for land value only, Mr. Kholodov says, after a smaller neighbouring lot was severed and redeveloped with two houses.
Mr. Kholodov believes a builder might put two or three houses on this 75-foot-by-64-foot lot, which has an asking price of $3-million.
The existing house has been well-maintained, he says, but it cannot compete with many of the new houses being built today, which have such enticing features as high ceilings and large windows.
For that reason, he hasn’t even added interior photos to the listing.
“The house is nice,” Mr. Kholodov says. “The reality is, a house similar to this one was torn down to make room for two new ones about three years ago.”
Mr. Kholodov is not hesitating to list this house in November because a developer needs lots of time to plan, obtain regulatory approvals and rebuild.
“This is not the seasonal buyer that needs the kids to go to school in September.”
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