We got a 25 basis point rate cut about a month ago and now we are looking forward to possibly a 50 basis point cut near the end of this month.
Does that change anything in the real estate market?
Based on our front end sales activities, I can tell you that the market is obviously more energetic since the third week of September.
We just sold a detached house in Markham and a condo in North York, both with multiple offers.
Some buyers who put their plans on hold are calling us again to restart looking for a place.
Now I’m not saying that the market is going crazy again.
But comparatively speaking, the market was super sluggish before, most people are just not in the buying mood at all, now there is definitely more energy in the market.
That’s just my personal observations.
Let’s take a look at the official reports.
I’m going to show you the comparisons between this year and last year in August first.
Then I will show you the comparisons in September so you can actually see the change.
In August, sales activities were 5.3% below last year’s levels.
As we know, a lot more people are trying to sell this year and that’s reflected in 46.2% more active listings.
Generally speaking, prices were still holding on at around the same levels.
Now let’s talk about September.
In a hot Toronto real estate market, September is typically a busy month because people are back from their summer vacations and the weather is still favourable for moving.
Say from 2019 to 2021, sales activities increased from 1 to 5% going from August to September.
But for the past 2 years, sales activities actually decreased going from August to September because of the rate hikes.
In 2022, sales activities decreased 10% from August to September.
Last year, the decrease was more than 12%.
This year, after 3 consecutive rate cuts, we saw pretty much the same number of sales in August and September.
So we are maintaining that sales momentum, I think it is a good sign that the market is showing some recovery energy.
If we compare that sales number with last September, we are up 8.5%.
In terms of active listings, we are still 35.5% more than last year, down from 46.2% in last month’s comparison.
We obviously still have a lot of available listings for the market to digest, so we probably won’t see much movements in terms of prices until more listings are consumed.
Which market segment is attracting the most number of buyers right now?
In the 416 detached market, sales activities increased 10.1% in September compared to a year ago.
905 detached? Up 10.7%.
What about townhouses?
In the 416 area, sales activities were actually down 8.7% compared to a year ago.
In the 905 area, we saw a completely different picture.
Sales activities were up 21.4%.
That’s the most popular housing type right now, townhouses in the suburbs.
Why is that?
That’s where you can find the cheapest low rise properties.
What about condos?
Sales activities were up 2.2% in the 416 area and down 2% in the 905 area.
Condos are still lagging behind because of the piled up inventories.
You see, townhouses in the 905 area are going to drive the market recovery.
When prices get to a certain point, people will start looking at the next cheapest thing in the market, which will be condos.
It is going to take another 8 to 12 months before we see prices start trending up again.
If you are a seller and you have decided to sell now, I want to tell you that there are certainly active buyers in the current market, but there’s one thing you have to understand.
There are too many choices out there.
The biggest challenge you need to overcome is how to stand out from the crowd, tell the buyers to come to your property and forget about the others.
If you have been following us on Instagram, you know that we have been constantly getting properties sold.
Strategies, tactics and relationships all matter in this very tough market.
Yes, it does take some luck too, but if you purely rely on luck, then good luck!
But if you do want to leverage my knowledge, skills and relationships to get your properties sold, you can schedule a call with me.
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