How to Benefit from a Down Market.
As we have all read and seen, the media recently has taken a “doom and gloom” point of view when discussing the real estate market in the Greater Toronto Area. This may cause a wide range of emotions in many of us making us feel anxious, worried, stressed and so on. It’s hard to see the positives in hard times when it is consistently thrown all over the media and the internet.
Our team’s latest insights can provide you with a rare point of view focusing on tips for buying/selling, advantages, or what not to do in a down market. Take a look below at the valuable insights some of our team members have put together on today’s market, covering the topics previously mentioned.
Fran Bennett |
Senior Vice President, Sales & Realtor
Your thoughts on the current market?
For those that want to make a move up, down or sideways, today's current market offers a strategic buying opportunity. Generally speaking, buyers now do not have to face bidding wars and are able to submit offers that include conditions such as building inspections, lawyer review or possibly even a vendor take back mortgage.
What are ways people can take advantage of a down market?
In the current down market, buyers will find their desired home more affordable.
What shouldn't people do in a down market and why?
Buyers should never assume that they can buy in a down market and then flip their house for a quick profit when the prices begin to rise. Buying real estate should always be considered a long-term investment.
What are your tips on buying/selling real estate in a down market?
Selling real estate in a down market means pricing is key and you should always price with a very sharp pencil. Pricing just on the high side of fair will always produce the best results.
Nancy Lee Jobin |
Sales Representative & Realtor
Renting/leasing in a down market vs buying property.
If you live in Toronto, you know that the rental market is expensive and that since Summer 2022 there was a substantial increase. Given the number of International Students and Immigrants that we welcome every year, the rental market is poised to stay high.
The real estate market in Toronto for the past 20 years has been phenomenal. If you were lucky enough to purchase in the past 20, 15, 10 and even last 5 years you’ve made money. I still believe that you will make money if you buy and paying down your mortgage is always better than paying your landlord.
How do you navigate the changing real estate market as a buyer or seller? What to expect and how to stay positive.
One of the biggest problems in Toronto’s down market is that there is a limited selection of properties to choose from. Sales are down because less people are selling their property. Buyers are also on hold. And contrary to popular belief, the prices have not plummeted. Because of a lack of inventory, some sellers think that they can over price their house. Buyers are hopeful that prices have plummeted and want to low ball on offers. Neither of these strategies are working.
My advice to you if you are in the market to buy a house is to shop with an open mind. In Toronto, it’s difficult to check off all the boxes but there have been some great properties for sale this Fall, and they have sold fast and/or with multiple offers. You too can purchase a property, at fair market price, if you are prepared and informed.
As a buyer, one of the key things you need to understand is what your ideal property will sell for. Not what you want it to sell for. If you don’t do your homework, you will either under bid or overbid. The listing price is not often reality. Looking at comps without seeing the property, again is not reality. Your realtor can help you through this learning process and prepare you for your next purchase.
Dwayne Evens |
Broker
Your thoughts on the current market?
The buyers are starting to come back to the market as they are getting used to the idea of 5-6% interest rates. There is a general sense that rates will start to come down in the next year or two so buyers are seeing an opportunity to get a good deal with the hopes of dropping rates down the road. Homeowners are generally only selling if they need to, or perhaps, as investors, they have taken the route of renting it out for a year or so until the market comes back to its 2021 frenzy. This has caused an increase in rent prices unlike anything we have ever seen.
What are ways people can take advantage of a down market?
In a down market, there are incredible opportunities to upgrade from your current home to your dream home. For cash buyers this is particularly good because they aren't so worried about interest rates. But even for buyers who have mortgages and need to sell their current home, sure you may take a hit on the price of the home you're selling but you will more than make it up on the more expensive purchase of the new home.
What shouldn't people do in a down market and why?
Don't waste good opportunities. If you're a buyer looking for a home and you find the perfect one for your lifestyle, buy it. At the end of the day, you want to come home and be happy where you are living. No one knows what the future holds, but you will want to be in your happy place when we get there.
Renting/leasing in a down market vs buying property.
It has not been an easy year for renters and on the contrary for landlords. It is important to know how long you intend to stay in the rental home. If it will be five years, be sure to manage your expectations. Don't rent in a building occupied after Nov. 2018 if you want to have your rent controlled. Find something nice from 2017 that is comfortable and peaceful and that won't cost more than 1/4 of your income. If home ownership seems like an impossibly distant dream, find a business partner who compliments you and start a business. Commercial leases have softened a bit since the pandemic and there are opportunities to be had.
Lindy Goodman |
Sales Representative & Realtor
Your thoughts on the current market?
The current market is definitely calmer. It gives buyers and sellers time to consider their options and conduct these tremendously important transactions thoughtfully. I have never liked markets that were so wild and fast-moving that people did not have time to think. Mistakes are made when markets are so volatile. Buying or selling your home is something that should be done thoughtfully, not on the fly.
What are ways people can take advantage of a down market?
The market may be down but compared to what? Five years ago, ten years ago? Past downturns have shown that the market always recovers. A down market may prove challenging for short-term buyers or flippers, not for those who are looking to buy and hold onto their investment and enjoy it and live in it for a while.
What shouldn't people do in a down market and why?
People should not panic in this market. Sellers may not feel they are getting as much for their home compared to prices attained last winter and early spring but there are two sides to consider. They are also not buying at inflated prices.
Aileen Halpenny |
Sales Representative & Realtor
What are ways people can take advantage of a down market?
If you have extra cash, you can purchase a property in a marketable area close to public transit and rent it out. The property values in the Toronto GTA remain strong, but if you can weather the storm, it will be a good investment down the road. Speak to your banker or mortgage specialist about what you can afford. Don't buy anything too costly and too big; there will be a need with the influx of immigrants coming to Canada in the coming years.
What shouldn't people do in a down market and why?
You shouldn't panic and try to minimize costs in other areas, so you're not selling at a loss. This is a temporary hiccup in the market, but it will pick up. If you are selling, be realistic about the listing price and don't compare it to the latter part of 2020 and 2021 when the market was on fire and it was cheap to borrow money. Those years were an anomaly partially due to the pandemic.
What are your tips on buying/selling real estate in a down market?
If you are a seller, please do everything to make your house show well, like staging, a fresh coat of paint, decluttering, and changing all the burnt-out lightbulbs. If there's an Open House, maybe put some fresh flowers on the kitchen island or dining room table, add some lightly-scented candles, and play calming music in the background. Potential buyers want to feel a vibe, and they appreciate the effort put in by the seller because it shows pride in their home. Lastly, be realistic about the days on the market and remain calm. Also, try to be open to the feedback and advice of your realtor. It would be best if you take emotion out of the equation.
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