The Toronto housing market has experienced an amazing change over the past few months. It goes without saying, it’s no longer “business as usual”.
But the change isn’t merely a shift from a sellers’ to a buyers’ market.
It’s a pervasive change, and all those involved in real estate – sellers, buyers, agents, mortgage brokers, builders, home-stagers – will have to adapt to the new real estate climate, or drown.
Bear in mind that 2007 was a banner year for home Toronto home sales. Fast-forward to September 2008, we see home sales dropped by 11 percent compared to September ’07. The average price also declined six percent over the same period, from $420,182 down to $393,647.
Buyers are now definitely in the driver’s seat. But it’s taking some sellers far too long to figure this out.
In the “old days”, when buyers were plentiful and bidding wars were the norm, offers conditional on home inspections or on financing were simply not considered. Home prices were based solely on how badly a buyer wanted the home, and how much they were prepared to pay for it.
As a sobering sign of the times, bidding wars have virtually disappeared, along with the free-spending buyers.
So what does the future hold for the Toronto real estate market?
Is it all gloom and doom? I don’t think so. Back in 1910, Florida real estate lost 90 percent of its value. It was widely believed at the time that Florida real estate prices would never recover. Well, they did. And I believe that the Toronto market will recover, too.
Slowdowns and recessions come and go. And recovery will come, though probably not tomorrow.
In the meantime, we all must adapt to the changing economic times if we are not only to survive this new real estate climate, but thrive in it.
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