By: Kim Melhuish

Well…although the crazy train may have left the station, the real estate market is still holding its steam.  Since the start of Covid in Q2 of 2020, there has been NOTHING predictable – or even sensical in many instances – in the housing market. We’ve had summers that are typically slow having houses with 20+ showings in a day, we’ve had December holidays with offers going in on December 24th and virtual open houses on December 26th.  But, even with all of this, the story of the market has been the outrageous bidding wars that were leaving sellers in awe and many buyers extremely discouraged.


There has been great speculation and debate as to how long the increases could possibly continue and what would happen when the peak was reached.  A rapid rise and frenzy in the market occurred for a period of time in 2017. In that instance, there was a very sharp and abrupt decline in the housing prices and an increased length of time on the market that had many holding multiple houses and/or bridging the cash differential between bought and sold.



Housing prices were steady month over month at the end of Q2 (no increase or decrease) *Source TRREB Market Watch. Greater Toronto and Hamilton Area

 For us currently, it seems that the peak of all of the frenzy was in March, 2021 with very subtle cooling after that.  The data from Q2 shows that it is only a slow cooling and that housing prices are holding, but without the consistent bidding wars that were being seen and were creating a lot of the chaos and frustration for buyers.   With that said, there are still pockets that are getting the bidding and going well above asking price, and so it will be very important to have a real estate agent that is watching the specifics and subtle trends for your street/house-type so that you’re not underpricing trying to get a war going or that your house doesn’t end up sitting where 13 days on the market currently creates a ‘stigma’.


It will be interesting to see how things unfold in Q3 2021. I suspect it will remain a seller’s market but where there is more balance for buyers with fewer houses holding offers and prices being listed for the amount that the seller is hoping to get.  We may even see some conditions back in offers and…dare I say…some room for negotiation for buyers.  This can be seen in a ratio known as the SNLR (Sold to New Listing Ratio) where any number under 50 is a buyer’s market and any number between 50-60 is a balanced market.  We are slowly decreasing from numbers that were in the 80’s earlier (!!!) and sitting closer to 60-70 range.



Housing prices increased by 17% between June 2020 – June 2021. *Source TRREB

 

When we look at the overall averages for the Greater Toronto and Hamilton area for the end of the second quarter we see evidence of this holding, with houses selling closer to the asking price than they were previously and with the sold price staying fairly steady from one month to the next .  Is this bad news for sellers? Not at all!  The data shows that the housing prices are staying steady close to those peak prices in March and so your asset has still gained close to 20% from year prior (chart to the left).  The good news for sellers is that now you can actually find a new home to move into after you sell.  LOL.  It’s a WIN-WIN market.

 

Feel free to reach out for any information on the stats and trends happening in your neighbourhood.

 

 

Independent Opinion of Kim Melhuish https://KMrealhomes.ca  416-804-9604  Realtor, Century21 Miller Real Estate Ltd., Brokerage

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