Etobicoke Real Estate Then and Now:

What You Need to Know About Buying and Selling in 2022

Have you considered buying or selling property in the Etobicoke area lately? If so, you may have noticed the market has grown substantially over the past few years. Etobicoke has long been one of the more desirable areas in the GTA. According to Canadian Real Estate Magazine, it has been in the top 20% of all Canadian suburbs since 2016.  

However, when the pandemic hit in 2020, Etobicoke became even more popular as condo owners and apartment dwellers searched for homes with more space and a backyard to enjoy. Housing prices were already on the rise, but they’ve recently skyrocketed to unprecedented amounts. 

Want to know more about selling your home in an uncertain market? These timeless resources will never go out of date:

• When Is It A Mistake To Sell Your House?
• What Is Home Staging And How Does It Help?
• What Help Is There Available To Move Seniors?

A Lot Has Happened Since 2008

Back in 2008, no one would have imagined the sky-high prices of 2021. Canadians were experiencing one of the worst housing markets in history. A combination of predatory lenders and inexpensive financing caused the US market to crash. While Canada’s tighter regulations helped us avoid the worst of the fallout, our market was still affected. The number of transactions dropped by 40%, and housing prices decreased by almost 10%. After a rocky few months, the Bank of Canada lowered interest rates, and the housing market began to bounce back.

In 2017, we went through another lull when the Ontario government introduced the Fair Housing Plan, which resulted in fewer sales and a 20% drop in average property prices. However, this drop was short-lived, and housing prices soon began their upward climb that eventually peaked in early 2022. 

To illustrate how dramatic this boom has been, just remember:

In 2018, you could purchase a detached house for under $1 million. 

Today, the average price for a four-bedroom house has almost doubled to an average of $1.9 million. 

Is The Market Shifting Again?

When the Bank of Canada announced a series of interest rate hikes in late 2021, we thought we may have seen the end of the frantic market. However, the announcement had the opposite effect as buyers rushed to secure a house while the cost of buying was still low. 

Multiple offer scenarios occurred frequently, and fierce bidding wars ensued as competition increased. However, now that the first two interest rate increases have taken effect, we have noticed a shift in local real estate conditions.

The seller’s market remains strong in Etobicoke, but things are not as competitive as in January and February.

Here is what we have noticed so far:

1. There has been a decrease in the average selling price as more homes come on the market. It all comes down to supply and demand. In January and February, buyers were frantically scooping up almost everything that hit the market. This inventory shortage drove prices to record highs.
2. There are more homes available for sale now. Sellers are following the headlines and listing their homes while the market remains in their favour.
3. Supply is still tight, but buyers have far more options than they did several weeks ago. The motivation has changed from “fear of missing out” to “a fear of overpaying.”

Why the Etobicoke Market is Changing

The first two interest rate increases seemed to cool the market. Now, another announcement is expected within a week or two. Rising interest rates may impede some buyers, but they aren’t the only reason for the changing real estate market. 

Inflation has also reached a 31-year high, which may have some buyers reconsidering their purchases until they feel more financially secure. And, of course, the war in Ukraine has everyone feeling nervous over what the future might hold.

Thinking of Selling a Home in Etobicoke? Here are Some Things to Keep in Mind

Is it still a good time to sell your home? Or should you wait to see what happens in the market? At Thompson Sells, we believe the best time is always when it suits your lifestyle and your plans for your future. Why? The market is impossible to predict, and you can miss out on prime conditions while constantly waiting for things to “get better.” 

That said, we are still in a very strong seller’s market. There are still more buyers searching for homes than there are listings to choose from. And even with the next interest rate hike, the overall rate remains at a historical low.

However, you may need to reset your expectations and adapt to the shifting market. Earlier this year, homes were priced with a presentation date and would receive multiple offers. Today, a better strategy is often to price with offers at any time.

These guidelines will help ensure your success in a changing market:

• Make your house appeal to buyers: Even during a seller’s market, you will still get the best results by preparing properly for the market. This means cleaning, decluttering, making minor improvements and even staging to make your home as attractive as possible to potential buyers.
• Market and promote effectively: Remember the law of supply and demand. The more potential buyers who see your listing and fall in love with your home, the better results you will get. 
• Set your price strategically: Pricing too high or too low is among the worst mistakes any home seller can make. You want to set a price that’s low enough to get the attention of buyers but not so low that you undercut what your home is worth. For the best results, work with a skilled real estate agent who specializes in your area.
• Be patient: At the height of the housing boom, it was common for properties to sell within days of being listed. In a normal, healthy market, 20 days is average. Don’t feel discouraged if your house doesn’t sell right away.

Tips For Buyers In a Changing Market

The best time also depends on your circumstances rather than current market conditions as a buyer. Your decision should focus on what kind of house you want, what area you want to live in and what you can comfortably afford. That said, here are some tips to help you succeed even during competitive situations:

• Get prequalified before you search: Failure to obtain financing is the number one reason a purchase falls through. If you know how much you can borrow before you begin, you’ll be able to make an attractive offer a seller is likely to accept.
• What conditions can you be flexible on? Placing the highest bid is only one part of a successful offer. Sometimes, a seller might actually take a lower amount in exchange for an unconditional offer or flexibility in the closing date.
• Work with a real estate agent to access unlisted properties: Your real estate agent likely has a vast network and may find listings that you can’t access on your own.

The value of real estate may fluctuate depending on other economic factors in the world. However, in the long term, property values almost always increase. Your safest bet is to always consult with an experienced local real estate agent who understands the nuances of your area.

Are you planning to buy or sell in 2022? We are happy to point you in the right direction! Contact us today with any questions you may have.