Etobicoke Real Estate Market Update – January 2019

As we begin a new year, it’s always fun to take a quick look back on the previous year and what happened in our real estate market. Each year is different from the last and 2018 was no exception. It was a tougher year for both buyers and sellers than we had seen in the recent past. Here’s a quick recap on 2018.

Home Prices

Detached Homes

2018 was a year where we saw a decrease in home prices after several consecutive years of price increases.  On average, home prices decreased 10% in 2018 from 2017. In 2017, we saw home prices peak in the April and then fall back for the remaining of the year.  If we compare home prices in Q4 2017 to home prices in Q4 2018, the decrease narrows to 2%.

As we look ahead to 2019, we expect detached home prices to stabilize with a slight increase over 2018 prices.

Condos

2018 was a year where we continued to see condo prices climb. We saw an increase in price of 12% when comparing Q4 2018 with Q4 2017.

Condo prices have now been on the rise for several years. At some point, we’re going to see a slowdown in price increases consistent with what we’ve seen in the detached home market.  Could 2019 be the year?

Number of Homes SOLD

Detached Homes

The number of detached homes SOLD in 2018 was down 24% from 2017. It seems that sellers may have been waiting for brighter days. Only those sellers who had to sell put their homes on the market.

Condos

The number of condos SOLD in 2018 was down 36% from the number of condos SOLD in 2017. It was a year where we saw many condos selling in bidding wars because of the shortage of condos on the market. Condos definitely became the hot commodity of 2018.

The ratio of the inventory of homes for sale versus the number of homes sold is an important indicator of supply and demand. A ratio of anything less than 4 typically means that we’re in a sellers market. A ratio of 4-5  is a balanced market. A ratio above 5 is a buyers market.

In December, the ratios climb to 3.4 in the detached home market.  This means the supply for detached homes is getting closer to a balanced market. We’ll likely see fewer bidding wars in the detached home market. Buyers will shop the market looking for the best value with more choice of homes to preview. Sellers must make their home stand out in order to sell in a balanced market. Additionally, sellers can expect that the average time it takes to sell their home may be longer than what we’ve seen in prior years.

The condo market is still a sellers market with condo supply constraints. Many buyers will be competing for the same condo which leads to bidding wars. The good condos that are well priced will continue to sell quickly.

Detached Home Market Trends

• We’ll see a more balanced market between buyers and sellers in 2019.
• Well-priced homes in popular neighbourhoods will continue to sell, some still with multiple offers.
• Most homes will be priced at market versus priced for a bidding war. Pricing your home correctly is critical in this market. Over-priced homes will simply sit on the market.
• Home price trends are really neighbourhood-specific with prices in some neighbourhoods increasing faster than in others.

Condo Market Trends

• The volume of condos sold was down in December.
• Prices continue to increase in this hot market.
• With the new mortgage rules in place and detached home prices being simply too high for some buyers, condos often end up being the best option.
• Bidding wars are now more commonplace in the condo market. Be prepared!

The charts below give you a look at the trends in volumes and sales prices over the past year:

Etobicoke Average Sales Price of Homes and Condos

December  2017 – December 2018

Etobicoke Sales Volume of Homes and Condos Sold

December 2017 – December 2018

Detached Home Neighbourhood Average Prices Q4 2018

Condo Neighbourhood Average Prices Q4 2018

Our Tips for Buying and Selling This Winter

So what does this all mean if you’re thinking of buying or selling? We’ve got some tips to help you decide what to do.

1. Thinking of selling your home soon?

Many sellers have been holding off putting their home on the market in the hopes that prices will increase. We’ve seen five interest rate hikes over the last year which has effected home affordability.  The time may have arrived for those sellers sitting on the fence to get their home on the market.

Sellers will need to price your home right for the current market. There are buyers out there ready to purchase, but they don’t want to buy an overpriced home. It also needs to be staged to look its best and requires maximum exposure so that all potential buyers see it.

2. Are you looking to upgrade from a condo to a detached home?

Don’t wait; the time is now! You don’t want to look back in six months and think If only I’d made the move a few months ago. You’ll still get more bang for your buck than you would have this time last year. It really is still an ideal time to make a move.

The one potential downside of today’s market is that the inventory of both detached homes and condos for sale in Etobicoke is still low. Many offers are now coming in with conditions. It’s advisable to work with an experienced agent who knows what conditions are problematic and which ones are fine.

3. Are you a first-time buyer and wondering where to start?

If you’re beginning your search, one of the first things to do is to get pre-approved for your mortgage. This way, you’ll know exactly how much you can afford and avoid disappointment. The best time for you to buy is yesterday and the second best is today. Don’t wait.

4. Are you deciding whether to buy or sell first?

We delved into this topic in a recent blog post, but in general, it’s a good idea to sell first. You’ll know how much you have to spend and you won’t have to settle for a lower price if the sale ends up taking a long time. If you do buy first, you could consider adding the sale of your home as a condition in your offer. Unconditional offers were the norm for a while, but sellers are more open to considering conditional offers in today’s market.

If you’re thinking about buying or selling in the near or far future, we’re here to help. Get in touch with us today!