By: Matt Webb

It’s a Motivated Market.

One thing that nobody tells you when you get your real estate license is that the only thing anyone is ever going to want to talk to you about for the rest of your life is ‘The Market’.

Family get-togethers, BBQ’s, random people you meet in line at a chip truck. They never say: “Hey, how’s your family doing? Have you had a good summer?” Not at all interested! But they do always say: “Hey, so how’s the market doing?”

These casual interactions offer a great insight into what is motivating people, what they think is going on, how they feel and these little chats can tell you a lot if you listen.

Over the summer, I found an abundance of buyers coming back to the market. Many had been waiting a year or more to start their search in earnest and were all motivated by 2 things: First they were watching prices level off, and second the first Bank of Canada rate cut to 4.25%.

As Toronto Regional Real Estate Board (TRREB) President Jennifer Pearce said in the most recent press release: “The Bank of Canada’s rate cut announced on September 4 will lead to a further improvement in affordability, especially for those using variable rate mortgages. First-time buyers are especially sensitive to changes in borrowing costs. As mortgage rates continue to trend lower this year and next, we should experience an uptick in first-time buying activity.”

Current buyers are informed but cautious, they aren’t going to overpay. They have been on Realtor.ca everyday for months watching specific properties and areas, price reductions, homes that were overpriced and they have a strong idea about what they are willing to spend and are looking to negotiate.

On the flip side, sellers were also getting the message. The property you bought 4 years ago, or wished you sold 3 years ago, is not worth that number any more.

The market has corrected, and sellers clinging to 2022 prices are sitting on the market for 180 days in some cases. Some of these sellers are going to be walking away with a loss on their purchase, others simply choose to ignore the reality of their situation. If you bought in 2013 for $300k you can’t be upset to sell for $600k today, even if you really think you should be getting $800k, that market is gone and it’s going to stay gone for a while.

At time of writing this article there are currently 1,523 active MLS® listings across the Georgian Bay / Southern Horseshoe area, a 26% increase from the 1,206 listings available in August 2023. This is the highest inventory level of properties for sale on the local MLS® System since 2015.

A portion of the abundance of inventory that is for sale currently is a hangover from the lofty days of Covid when money was cheap and city buyers were awash with cash. Many homes for sale in our rural areas are not primary residences, but recreational properties, up for mortgage renewal at 5% or more, not the 1.7% they bought with. These sellers often have primary mortgages in the city they are also dealing with, so the first thing to go are the leisure properties and recreational investments.

I recently had a client who was looking to move to Collingwood, to a 2 bed 2 bath condo or townhouse so he could be closer to his daughter. I found 25 listings between $495-$525k within a single square kilometre. One building had 7 properties for sale at the same price. Sellers are liquidating, and if you are looking to buy cash is king.

The Toronto Real Estate Board’s most recent “Market Watch” had pretty much the same story: “Greater Toronto Area (GTA) home sales were down on a year over-year basis in August 2024. New listings were up slightly over the same period. While the region’s housing market remained well-supplied in August, average home prices only edged slightly lower compared to August 2023.”

If you are a buyer that has been waiting and watching, time to get off the bench and get in the game. On the other side of that home purchase is a seller who is waiting for you to walk through the door, and they are motivated.