When Is the Real Estate Market Going to Change?

“When will the Etobicoke real estate market turn around?” It’s a question every real estate agent gets asked repeatedly throughout their career. It happened in the early 1980s, when interest rates shot through the roof, reaching as high as 20% at one point.

During the early 90s, a terrible recession caused property values to drop, and it took years to recover. Then there were the changes to the mortgage stress test that caused buyer confidence to plummet, leading to a long period of slow home sales. At this point, we don’t even need to mention the unprecedented seller’s market during the pandemic and the long correction period afterward.

The point is, the Etobicoke real estate market is always shifting, sometimes subtly, sometimes significantly. When someone asks when the market will change, what they really want to know is whether or not conditions will be in their favour. If you’re planning on buying or selling a house, here is what you need to know about the new “normal” in Etobicoke real estate.

What is it like to buy or sell a house in Etobicoke? Find out in Your Top Questions About Real Estate Answered.

Don’t Be Intimidated By the Big Picture

Etobicoke is one of the main suburbs of the City of Toronto, which is a massive market. Housing prices rise and fall with the latest Bank of Canada announcement about interest rates and economic events from around the world.

When you listen to the news or read the latest real estate reports, you’re getting a lot of information thrown at you. Most of these numbers are averaged out across different neighbourhoods and various housing structures, making it difficult to interpret the data to create a workable plan for your next move.

Overall, the market could be in a slow period, undergoing a significant correction, or experiencing hectic demand where houses sell within days. When buying or selling a house, it’s important to understand these overall trends. However, remember that stats alone do not tell the whole story.

General Scenario #1: High Inventory Markets

Etobicoke real estate is fast-moving and highly nuanced. Nevertheless, we can typically generalize conditions into one of two scenarios: a high inventory market or a low inventory market.

Periods of high inventory mean there are plenty of homes available on the market. If generous supply is also coupled with low demand, then buyers are in an excellent position, while sellers need to go the extra mile to ensure their listing holds maximum appeal.

High inventory could also be coupled with high demand, which results in a more balanced market. You still shouldn’t become complacent, but this is typically an easier and less stressful situation when a move is coming up.

General Scenario # 2: Low Inventory Markets

A low inventory market means there are few homes available in Etobicoke. Paired with high demand, it creates a busy seller’s market where the seller holds most of the negotiating power and buyers must compete with other hopefuls.

If supply is limited but there is also little demand, it creates another balanced situation, although once again, things can change quickly. More homeowners could decide to list, which would tip the scales in favour of buyers. Alternatively, buyers could get off the fence and begin competing for the few homes available, which would lean back to an advantageous market for sellers.

Real estate can be unpredictable, but there are also cycles. For example, spring and fall markets are busy in general, with both sellers and buyers motivated to act. Summer and winter tend to be much slower, with fewer listings and fewer people searching for them.

Staying informed with the latest news can also give you an idea on which direction the market may be headed. Nothing is ever written in stone, but there are definite patterns:

Announcements about lower interest rates tend to create more demand for houses and can drive prices up.
Higher interest rates can cause buyer hesitation, which means homes take longer to sell, and prices often drop as a result.

Looking for more selling advice? You’ll find great insights in the posts below:

A Success Plan for Sellers in a Shifting Market

Your first task is to sit down with your real estate agent and see what is happening in the local real estate market. A low-inventory, high-demand scenario may be ideal, whereas a surplus of supply can make selling your house a challenging feat.

However, you can still achieve a successful sale with a little patience and a strategic plan. Whether the market is hot or cold, the following tips will help you stand out and command the attention of buyers:

Remember the “Three Ps of selling: Price, presentation, and promotion.”

Prepare your house by thoroughly cleaning, decluttering and making minor repairs that increase perceived value.

An attractive price is always critical, especially during an uncertain market.
The more exposure your listing gets, the more likely it will sell.
Extensive advertising is just the beginning. Expert networking could be even more valuable in finding a qualified buyer.
Be conservative about how long it will take to sell your home and how much you will earn, especially if you plan to buy a new house before selling yours. Realistic expectations are essential!

Buyers, Be Ready

It may very well be a traditional buyer’s market when you begin searching for a home. That means most conditions are in your favour, and you can likely look forward to many options to choose from!

However, Etobicoke real estate prices tend to be on the high side in every market. The following steps can help you get the best value for your home anytime regardless of the situation.

If you are selling an existing home before buying, you must do everything you can to maximize the value of your sale and fund your next purchase.
Getting pre-approved for a mortgage ahead of time will help. This allows you to be more competitive when placing offers in the event that another buyer wants the same home you do. Plus, you can lock in the lowest interest rate between now and the next 90 to 120 days.
Work with a mortgage broker to find the best rates and terms possible.
Save as much as you can for your down payment and deposit. The more you pay upfront, the less you will have to finance at a high interest rate.
Work with an experienced real estate agent who can achieve the best value on both sides of your transaction.

Are you getting ready to buy an Etobicoke home? The posts below can help you form your strategy:

Look at the Micro Trends

Every Toronto suburb and neighbourhood is essentially a “micro-market” all on its own. Often, these areas will follow the larger trends, but sometimes, they run contrary to all expectations.

Homes in highly desirable areas sell quickly even when everything else sits on the market with little interest and no offers. During busy times and very little supply, some great neighbourhoods go unnoticed and can boast excellent opportunities for buyers.

Whether buying or selling, a well-researched strategy can help you succeed in reaching your goals. That’s why it pays to work with an experienced local real estate agent who lives and works right in the neighbourhood.

Are you in the planning stages of an upcoming move? Our Etobicoke real estate agents are here for you, right from the beginning. Reach out today at 647-282-7653 or email contact@sileckythompson.com with any questions.