| Selling

We tend to frown when people start tossing around alarmist terms like “market crash” too soon and too often. It’s so 2018. This is a term that can put people in panic mode, especially homeowners. Whether you own a home, want to buy or were thinking of selling, here we explain why you don’t have to panic right now.

Looking for more real estate market news and reports? We have a whole blog category dedicated to the topic. See more here.

Homeowners Keep Calm

Housing prices can get scary when we think of our properties as more of an investment than a home. Don’t get us wrong. Your home is probably your greatest asset and really is something that helps you build a nest egg. When you hear prices are dropping, you have to look at the bigger picture. Prices around these parts have been seeing an upward trajectory that most people felt wasn’t sustainable. Nonetheless, the reality is real estate tends to go up. When we look at month over month, yes things seem dreary. BUT when we look at things year over year, they’re still going up, albeit at a slower pace than we’ve seen for a while. 

Although prices fell month over month by 6 percent in July, they were up 1.2 percent year over year. So even if you bought your home last year, you’re still seeing equity build. It’s just that things were so crazy high last year, it makes it harder to see an increase that’s knock your socks off impressive this year. So, homeowners we say, just keep calm and carry on. Enjoy your home but keep an eye on interest rates if your mortgage is up for renewal soon. Even a few points can make an impact on your budget. 


We’re keeping tabs on everything you need to know about the real estate market in Toronto. Here are a few more resources to help you get a clearer picture on the trends:


Real Estate: The Upwardly-Friendly Investment

While tenants in Toronto don’t want to hear this, residential property investors in Toronto can also relax. Rents are rising along with demand for rental units with fewer people able to afford to buy a home. So, if you own investment residential properties in Toronto, or even Ontario for that matter, you can feel pretty confident you’re going to find many tenants staying in place. Rents should more than cover your mortgage and condo fees, as annual rent price growth is in record hitting territory. 

Smaller, less expensive apartments are seeing the greatest increases because the days of the COVID rental decrease are gone. In the second quarter of 2022, units like studios and one-bedrooms enjoyed annual rent growth rates of 25 percent and 19 percent respectively. So, landlords, you too can relax.

We took a closer look at the lasting impact of COVID-19 on the Toronto real estate market. Read more here.

Buyers Start Your Engines

Now for buyers. As the guys with the checkered flags say at the Honda Indy races, start your engines. You’re finally moving into the drivers’ seat as things start to balance out. Notice this is balancing, not crashing. Balance is good. That said, we do have a few words of caution.

Interest rates and the mortgage stress test are going to negatively impact how far your loonie will go. However, with more bargaining power thanks to fewer buyers around, you could find a few positives that might help balance out those mortgage payments. First, we aren’t seeing low inventory causing higher prices and bidding wars. Second, chances are you’ll find you’re paying either asking or in some cases even slightly (probably very slightly) under asking.

These are nice things to hear for buyers. Although you can’t throw caution to the wind, if you can pass the stress test, and double confirm you can afford your mortgage payments, then you can still consider buying. You want to get in there before the Bank of Canada makes good on its promise and increases interest rates again. 


Looking for more Toronto home buying resources? Check out these blogs and pages to get started:


Sellers Consider Your Equity

That brings us to sellers. As with any home sale, you need to consider your equity. When you bought your home impacts your profits. Also, because the market is becoming more balanced, you aren’t going to rule at the negotiation table. There are fewer buyers, so demand is down. However, we think you could see some relief if more sellers step back hoping prices will rise again. If inventory tightens, you could regain at least some of your negotiating power. 

This is the time to work with a savvy real estate team (like us!) to assess your home, compare going rates for homes in your area, and consider inventory. They’ll help determine if it’s a good time to sell. If you don’t have the luxury of waiting, i.e., your job is taking you out of town, you’re getting divorced, etc. then there’s still really no need to add market conditions to your list of worries. Even if you bought your home last year, as mentioned, that 1.2 percent increase year over year will still provide some profits. 

Selling can still work in your favour, especially if downsizing. And, because things are balancing out, you can find a better price for your next home. So, most sellers can also avoid panicking right now. 


Are you planning to sell in the near future? Here are some seller’s resources you don’t want to miss!


It’s a Soft Landing or Balancing

Where does all this leave us market wise? Let’s put aside the word crash and think of it more as a soft landing, or a balancing of the market. This helps keep homeowners and those selling focused on the real numbers to avoid panic. It also tells buyers to do what they should always do: Crunch the numbers, get pre-approved, and crunch the numbers again before you decide you can afford to buy. We realize this will leave a lot more of you finding you can’t afford a home. However, speaking to a real estate agent can help put things in perspective, so you understand your options. 

If you’re wondering what makes the most sense for your real estate strategy right now, The Christine Cowern Team’s got you covered. Give us a call at 416.291.7372 or email us at hello@christinecowern.com. We’d love to work with you!


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