I’m gonna make this one short and sweet, since I know everybody is getting ready for the long weekend!
Let me take a quick poll below and get a sense of how you all think the market is going to do…
There are a few burning questions to be answered, although, these “answers” will really come in the form of guesses; educated and otherwise.
What do YOU think is going to happen in the fall market?
Here is what I’d like to know…
1) What will happen to the average price?
The average price of a Toronto home topped $500,000 in the spring of 2012 – coming in at $501K, $502K, $508K, $516K, and $517K for five straight months from February to June.
Will the average house price top $500,000 in September, after cooling to $476,947 in July?
Will the average house price stay above $500,000 as we move into 2013?
2) Will the “summer lull” continue?
The summer is always slow, and as I showed last week in my post titled “You Can Make Numbers Say Anything,” the drop-off from spring to summer was more pronounced in 2012 than in 2011.
Will we see a continuance of July/August as we move into September? Or will things revert back to the way they were in the spring?
3) What kind of sales volume can we expect?
There was a massive jump in sales in September of 2012 – 7,658 in total, compared to 6,138 in 2011. That’s a 25% increase! New listings only increased by 15%, so the market tightened, and prices increased.
Are we going to see more than 8,000 sales in September?
Was the market slow enough in the summer that we can expect huge sales numbers in the fall?
4) Have we seen the end of “hold-backs on offers?”
I saw a new listing today for a crappy townhouse condo in North York with everybody’s favorite line: “Offers will be considered on September 5th.” Who the hell is going to ‘bid’ on a property like that, and who the heck is looking at real estate the day before the long weekend?
I’ve never liked the hold-back on offers, or the multiple offer process. I can’t abstain completely, or I wouldn’t be doing my job for sellers, but I do take a much more ethical approach to the situation than I’ve seen on the flip-side when representing sellers.
Some people believe that the end of the bidding-war-game will only come when buyers stand up and say “NO,” but I think it has more to do with the market, and supply and demand.
When properties are no longer in high demand, you won’t see multiple buyers anymore; you’ll only see the one necessary to get a property sold.
The market has to cool significantly to see the end of hold-backs on offers, and even then, what’s to stop the gamesmanship of sellers listing and re-listing at different prices?
5) When will the media finally announce “the crash?”
I think that’s a fair question.
The media has been predicting a real estate apocalypse for long enough to see prices RISE about, oh, maybe 70%.
Rob Carrick wrote an article in the Globe & Mail last week about the “revenge of the first time buyer,” as if suddenly prices had tumbled, which they haven’t.
If the market were to drop 3%, would the newspapers call this a “crash?”
What about 5%? If we saw house prices in Toronto drop 5%, would Toronto Life feature a skull and crossbones on the front cover of the magazine and predict imminent death to all home-owners?
And what if, just for argument’s sake, prices rose another 5% this fall? What if the average house price ended up around $535,000 in October and November. Would the predictions of a collapse be even greater?
And just for fun…
6) When will the West Side Lofts see their first special assessment?
I closed on my deal yesterday, so now I can speak freely.
This is, without a doubt, the worst condo in the downtown core, and I pity the owners.
I honestly believe that this building is a money pit that can financially cripple many of the first-time-buyers who live there.
Maintenance fees have skyrocketed already, and owners have been hit with a “leasing agreement” for heating/cooling equipment that was supposed to be owned, meaning monthly fees are close to $0.70 per square foot, plus leasing equipment, plus hydro. And that’s for a NEW building where fees are supposed to be artificially low!
The building is literally falling apart, systems are failing, and even though final closing just took place two weeks ago, I wouldn’t be surprised if the owners were hit with a special assessment or some sort of levy for $10,000 or more.
Maybe we’ll talk about WSL more in the fall? Or maybe I should take my lawyer’s advice, shut my mouth, avoid a libel suit, and move on.
Have a great long weekend, everybody!
The end of summer is never fun, but Fall gives us NFL Football!