Housing market seems to cool down, yet sellers’ expectations are still high

Most of the recent 10-years period, it looked like everything a homeowner needed to do in order to sell the property was to list it for sale, and a crowd of potential buyers would appear at the door.

It’s true, the so-called “seller’s market” – the imbalance between low supply and high demand – has been real for Toronto for many years, and the COVID-19 pandemic has only made it stronger.

Over most of the previous 18 months, the Toronto market has been overheating.

Having faced a new reality, buyers suddenly felt even more motivated than ever, increasing the demand and raising home prices.

As we’ve seen a year of mad bidding wars on properties often objectively unremarkable, we may say that many owners who decide to sell now just want to benefit from the situation while it’s still possible.

Nevertheless, the real estate market, although still hot, has cooled down since its peak in March. New listings are going down, and so are the sales. The number of showings and registered offers fell.

Something had to change at some point.

We are leaving the pandemic cycle, and amid availability of vaccine and the province reopening, people finally start feeling optimism. We are strongly assured that our kids will be back in class in the fall.

Home prices have pushed affordability to its upper limits. Now, buyers’ possibilities are restrained, and with the June 1st increase to the mortgage stress test and an almost guaranteed interest rate hike, people need to control their decisions.

We can see many poorly prepared properties listed on MLS without even home inspection. They show lower prices and an offer date. Some of them are relisted a week later with a significantly higher asking price. Offer day came and no offers were received.

It’s been a great period for sellers, and this pace may go on once we get back to normal this fall, but the pandemic caused heat is probably over.

In case you want to benefit from your property, the market is still profitable for you. However, it’s important to be realistic about your expectations.