Garry Marr’s recent Financial Post piece entitled “Are stubborn sellers killing the real estate crash?” raises a great question about the current housing market not just in Toronto and the GTA, but across the rest of Canada as well: when are Canada’s home sellers going to acknowledge that the real estate “bubble” has burst and begin to lower the prices on their properties?
Acknowledging that average home prices across Canada are more than twice as high as they were in 1999, the article then goes on to cite Urbanation statistics that indicate a very slight drop in condo sales over the past few months:
Urbanation says preliminary condo results for the fourth quarter show prices are down 0.8% in Toronto year over year and Canada-wide home prices were also down 0.8% in November from a year ago. But, so far, that’s about it.
If those numbers illustrate anything, it’s that home sellers in Toronto and other Canadian markets have so far been unwilling to drop their listing prices by any drastic amount. They’re still participating in the real estate market with confidence and demanding value for their homes.
A couple of the analysts interviewed in the article – including the Canadian Real Estate Association (CREA)’s chief economist Gregory Klump – indicate that sellers won’t be scared into dramatically dropping their asking prices unless there is a highly significant and sudden economic event that forces them to do so:
If you talk to some people, that key event — two that come to mind are a spike in interest rates or job losses — is not happening any time soon.
The article is a great read, and one that we recommend checking out in full – Marr was careful to gather insight from a wide range of sources, including those who believe home prices are doomed to decrease even without a cataclysmic economic event causing the market to crash.
However, as was indicated by a couple of those interviewed in the feature, real estate is truly local and regionalized. The situation in Vancouver – whose recent drop in average home prices was cited in this article – is completely unique from the situation facing home buyers and sellers here in Toronto. Moreover, the context of your own transaction (whether you’re buying or selling) is different from that of anyone else participating in Toronto’s real estate market.
Just like we can’t see the Rocky Mountains from Richmond Hill, we should not let the market conditions in Vancouver deter us from trying to get the best possible price for local homes. After all, that value is connected to local markets, not national ones.
As one of the GTA’s largest and most experienced independent brokerages, we acknowledge that any real estate transaction is a very personal process, and no seller or buyer should let national economic rumours and trends persuade them to make a decision they are not comfortable with. If you’re selling a home, sell with confidence – chances are it’s a perfect fit for someone who will happily pay a fair price.
Likewise, home buyers should continue to be realistic when it comes to asking prices. Sellers don’t control the market – you can work with your REALTOR to deter mine an offer that is both competitive and fair given the unique situation of that particular home sale. Remember: if you’re worried about how to price your home when it is time to sell, an experienced real estate agent or broker will be happy to help you decide on a fair price that reflects your true property value, the desirability of the area and your own personal situation.