FOMO – an acronym for “fear of missing out” – is an emotional reaction that has gripped GTA sellers and buyers over the past months. Despite changes in the market, the effects continue to ripple through GTA markets with varying degrees of impact.
Right now, the sellers that stormed into the market to capitalize on stratospheric spring prices are sitting pretty. Meanwhile, many of the sellers that waited at that time still remain on the sidelines because – as brokers like Sandra Pate, Johnston & Daniel, Royal Lepage, Toronto, and Scott Hanton, Keller Williams Advantage Realty, note – homes on great streets are still selling for $1.4 million or more while homes on slightly less advantageous streets now sell for $1.2 million compared to spring’s $1.4 million.
“Listings are down because sellers are struggling to accept the reality that GTA prices are resetting to what’s considered normal for the region,” says Hanton. “Conversely, savvy REALTORS® and their buyers recognize this is the time to get ahead of the eventual wave.”
In the face of the past few months’ perceived lull, second- and third-time buyers and sellers have kept the market moving because they needed to make a housing change due to altered life circumstances. First-time buyers who had been scared off by the spring market are finally ready to try again in the hope the quieter market will be easier to navigate and that they’ll find a suitable, affordable home before a third interest rate hike.
The reduced inventory and pent-up demand have created strong competition whether buyers want a house or a condo, new or resale. To come out on top, they will have to make their best effort in virtually every neighbourhood in Toronto proper. Demand for downtown condos is on the upswing and outpacing supply thanks to buyers who crave an urban lifestyle and no commute.
“Buyers on a budget are more likely to opt for a $600,000, two-bedroom condo than a $900,000, three-bedroom house,” says Hanton.
“The serious buyers are out there and the supply is so incredibly low that buyers have to get sellers attention the best way they can – with a great offer,” says Pate, whose spring market listings all sold over asking while her two fall listings respectively sold way over and just slightly under asking.
Right now, the incredible opportunities lie beyond the boundaries that once defined Toronto, in suburbs such as Pickering and Oshawa. They offer excellent value and while these areas have jumped tremendously in value over the past few years, these locations still aren’t top-of-mind or first choice for many buyers.
“Take advantage of the momentary lull in the suburbs to find a great investment,” suggests Hanton.
The new norm continues to demand adjustments from buyers, sellers and their agents. The 100-plus prospects that regularly swarmed spring open houses helped drive prices skyward, because people have a herd mentality and tend to follow the crowd. But as Pate rightly points out, you can’t recreate the circumstances that created that sense of competition and prices must be based on what’s happening now.
Not surprisingly, Torontonians are challenged to accurately decode and translate listing prices. A few months ago, a house listed at $699,000 implied the seller expected $850,000 or $900,000. Today, a $699,000 list price often means the seller will accept $699,000 if not less.
“I currently price based on the average list price on comparables,” says Pate. “In the fall market, price too low and you won’t get what you want, price too high and you’ll be ignored.”
The fall market is the perfect opportunity for sensible people with a practical streak.
“Get educated, do your homework, take your time and know that you’ll be comfortable and confident when you finally make a decision,” says Hanton.