January 2018 Market Review
As you have probably heard all over the news, this year has started to look very different from last year. With all the negative news out right now on the real estate market it is easy to get discouraged to participate in the market this year. Let me break down the facts and give you some insight as to what has happened in January and what will most-likely happen in the months to come.
What Happened Last Year!?
Last year was insane! It was a seller’s market with prices at an all-time high and interest rates at an all-time low! (To learn more about the rising interest rates click here.) Going to pre-construction offices on sale launch dates were insane, with people screaming, pushing and shoving to be the first in. Since when has there been multiple offer situations with pre-construction condos – nowhere except Toronto that’s for sure!
In the resale market it seemed impossible to put an offer on a property without there being at least 10 other offers. It was very competitive and intense to say the least!
So Now What?
This year it feels like a 360-degree change. With interest rates rising, the new mortgage stress test and rent increase caps, hesitation has set in.
Home Prices:
Home prices have dropped a bit in January adjusting to where they should have been last year, bringing us to a more “normal” state, though this may not last long. Prices are still expected to rise again. In January 2017 the average price of homes sold for $771,000, this January the average price is $736,783.
For those of you who bought in the craziness of last year, don’t panic! As long as you did not buy the property for a quick flip you are still okay. When buying a property, you should look at the long-term benefits. The value of your property will still grow in the long-term.
Inventory Levels:
January 2017 inventory levels were at a record low. This year the inventory levels are up with around 3 months of inventory, which still indicates a seller’s market. The market shifts to a buyer’s market when there is around 5 months of inventory.
Days on Market + Multiple offers:
Re-sale homes are on the market longer with less multiple offers which is good for buyers. In January 2017 homes were on the market for an average of 19 days. This January they are on the market for 32 days. Multiple offer situations are still occurring in the re-sale condo market in Toronto (more on re-sale condo market here).
With all the changes and uncertainty in the market, it is important to look to professionals for advice. Check out my Facebook and Twitter to stay up-to-date on the real estate market. Contact me anytime with your questions, I’m here to help!
