Are Prices In Etobicoke Going Down?

A few days ago, the country received news of the Bank of Canada’s largest interest rate hike to date, bringing the policy up to 2.5%. The real estate market was already slowing down after a series of earlier rate increases. However, as dire as the news may sound, neither sellers nor buyers have any reason to feel worried. 

In Etobicoke, average home prices have fallen approximately 10% from the peak back in March. This matches what is happening in most areas of the GTA. The situation might look bad, but only if you don’t look at the whole picture. Property values remain higher than they were one year ago, and not all areas have dropped in price. Houses in high-demand neighbourhoods with limited inventory have maintained all or most of their value.

Why Have Prices Dropped?

Interest rates remain historically low, even with the latest increase. However, the news and media have people feeling more anxiety than we had a couple of months ago. More homeowners have listed their homes for sale, which has boosted the supply from the critically low levels we saw earlier in the year. 

As of the June TRREB report, there were 2.5 months of inventory available. This level still favours sellers overall, just not as much as in February when levels went down to 2 weeks’ worth.

The drop in housing prices is simply a matter of supply and demand. More people are selling, but fewer are buying. Some people are uncomfortable making a move in the current market and have moved to the sidelines. Anyone searching for a home now has far more options, and properties are taking longer to sell. 

We’re committed to keeping your up-to-date whenever anything changes in the market. Here are some of our latest updates:

• Downsizing In A Shifting Market: Is It A Good Idea?
• Etobicoke Real Estate: Then And Now
• Is It Better To Buy Or Sell First In 2022? 

Why Now Is An Excellent Time For Etobicoke Homeowners To Sell

When the market self-corrects, you may feel like kicking yourself because you didn’t sell at the highest price point. But if you bought your home even a few years ago, it is now worth far more than you paid for it. It doesn’t matter if you didn’t time it perfectly. No one can time the market, and you’ll find nothing but frustration if you try. 

Real estate moves fast, and there is no way to accurately predict which way prices will move. Everything we have seen so far is simply a correction from an out-of-control market that was unsustainable. 

When you hear that the market is now “balanced,” it’s only in comparison to the unprecedented housing boom we experienced in the winter.

Although housing values have dropped slightly, they are still very high compared to historical prices. 

So how do you know when it’s time to make your move? The best time to sell your home is when you decide it’s the right time for your family. If that time is now, conditions are still in your favour.

How To Benefit From This Changing Market?

The changing market represents a rare opportunity that benefits everyone on all sides of the transaction.

Many buyers became discouraged in January and February as they faced steep competition. You could place offers on multiple homes and get outbid every single time. Now, you have the chance to jump into the market at a more affordable price and without getting involved in bidding wars. 

If higher interest rates are a concern, talk to a mortgage expert about your options. If possible, consider placing a higher down payment. The Home Buyer’s Plan allows all first-time buyers to pull up to $35,000 out of an RRSP towards your down payment. The more you pay upfront, the less you will need to borrow, which means you pay less interest.

For investors, this may represent a great time to expand your portfolio. You have more of a selection of every type of home, with less competition when bidding.

What about sellers? If you’re a seller who is also buying, you couldn’t ask for a better time. Yes, you may sell your house for slightly less than you would have during the peak, but you are also buying at a lower price. The change in pricing doesn’t hurt you at all. 

In fact, it’s a great time to upsize as the difference between the price of your existing home and the bigger home you want to purchase may be less.

What Will Happen Next? 

Unfortunately, it’s too early to predict where the market will go. Prices went down after the last few interest rates, but there were also other factors at play. Inflation is rising, and the summer season is generally less busy for real estate at the best of times. 

The negative news headlines may continue to impact consumer confidence and cause prices to drop more. However, each micro-pocket is different, making it hard to characterize the market.

Homes in less desirable neighbourhoods away from public transit or high-quality schools will likely experience a more significant shift.

Thinking of upgrading to a new home in a new neighbourhood? Here’s Everything You Need To Know About Buying A Home In Humber Valley

High-end listings over $2 million are subject to different lending rules, which may insulate them from the impact of the market slowdown. And, of course, homes in highly coveted areas and close to top-notch schools will hold their value better than other areas.

Is the time right for you to make a move? Get in touch today, and we will gladly answer any questions you have about buying or selling in the current market.