As anyone trying to buy a home in January remembers, 2022 started off a bit chaotic.
New properties coming on the market had slowed to a crawl. Competition was at its fiercest. Buyers lined up for offer day to bid on one of few homes available. And all but a single home buyer suffered the disappointment that comes when you learn your dream home is not going to be yours.
By the end of January, it appeared home sellers everywhere had received the memo simultaneously: you don’t need to wait until spring to sell your house. Listings suddenly came on the market, seemingly out of nowhere.
By March, this trend was in full swing. For our clients receiving daily new listings to their inbox, a mere handful of properties was becoming more of a directory. Many more options were coming available, and some home sellers even began selecting a listing price that more accurately reflected market value.
We haven’t seen that since the spring of 2020.
What’s going on out there? Let’s take a look at what happened in March across the GTA, and what the implications might be for the rest of the year.
Detached Homes in the GTA
One of the most common questions we hear is, is home pricing going down? The short answer is, probably not. However, what is likely to happen is that pricing will not continue to escalate at the pace that is has been going for the past two years.
In the short term, we are bound to see some pricing fluctuations as we see more homes come on the market. It’s likely we will also see a slight cooling in buyer demand as interest rates climb. First time buyers and those close to their budget thresholds may step back from the market, if only temporarily.
However, it’s also important to remember that we expect record levels of immigration this year. This will impact housing demand because these people will all need somewhere to live.
Here’s a snapshot of what’s happened with detached home pricing in the GTA in the first 3 months of this year:
What does all this mean?
First, we can expect to see continued pricing fluctuations in the market as demand and supply ebb and flow. This is normal and expected. Detached homes will move at their own pace, depending on demand, and other market segments such as semi-detached, towns, and condo apartments will show increases or decreases based on the demand for that area.
Make no mistake, though. Moving toward a more balanced market is good news for both home buyers and sellers. There will be less stress on home buyers as they find they will have slightly more time to decide on the home they want and the price they wish to pay.
Home sellers will continue to do well because the housing shortage has most certainly not gone away. As it stands, demand continues to exceed supply and that will continue to move pricing in a positive direction.
What we may see, however, is a movement towards more rational listing prices. It’s already started in some areas, as home sellers decide to forgo the option of holding an offer date and price their home at close to market value.
As a result, home buyers will need to continue being diligent in their research. Get some help by finding an outstanding REALTOR® who can help you understand the potential sale price for the home you are interested in.
Be sure you know what the expected market value is, and ensure your real estate professional shows you data to back up their recommendations.
If you’re shopping for a home and haven’t found the right REALTOR® just yet, get in touch with us. We can help you navigate the ever-changing real estate landscape – and reduce your stress level in the process.
Remember, shopping for a home is supposed to be fun!***