Etobicoke’s cooling housing market is real. What a difference a few months can make!
For more than a decade, sellers have been firmly in control. With more buyers than sellers, bidding wars were the norm and negotiations fairly infrequent.
Welcome to July 2017, the month power moved into the hands of the buyers.
What Does This Mean?
Realtors and economists use the sales-to-listings ratio to determine whether a market is in seller or buyer territory. A 50% ratio means that 5 homes are sold for every 10 that come on the market in a month. So a 40% ratio translates to 4 homes being sold for every 10 listed in a month. This is considered a “buyers’ market.”
In March 2017? 86% of the homes listed for sale ended up selling. In June 2017? Less than 40%!
How Can You Benefit From a Cooling Housing Market?
So it’s here; we’re officially experiencing a buyers’ market. You might be wondering if and how you can benefit from this shift. The answer is yes, and we’re going to offer up some tactics for reaping some rewards:
- Buyers – If you’re a buyer, it’s a great opportunity to buy a home for a lower price than you would have paid a couple of months ago. However, bear in mind that banks have tightened up their lending criteria so know what you can afford in today’s market before spending a lot of time house searching. House prices may be lower, but how much the banks are willing to lend you may also be lower too.
- Sellers – If you’re thinking of selling, you might need to go about it a little differently than you would have just a few short months ago. For example, in this uncertain market, it’s a wise strategy to sell before you buy. This way, you’ll know how exactly how much money you can spend on your new home. Bear in mind that although your existing home may have dropped in value, so will the house that you’re going to purchase.
- Buyers and sellers – No matter what side of the deal you’re on, remember that the primary objectives of home ownership are to provide a space you can live in and enjoy, and to raise your family in a place that is your own and you can be proud of. The fact that it is also a very good long term investment should be secondary. Reiterating these sentiments to yourself before going into any deal should help to ease any anxieties that the cooling market might induce.
House prices are down from the highs in the first quarter, but they are still up from where they were a year ago. How much? It really varies by market, but you can check out the stats here.
The cooling housing market does represent opportunities. Working with a neighbourhood expert can help you understand how it really impacts you and how to navigate through the complex process of buying or selling a home.