To our dear clients, friends and family,
With Thanksgiving just behind us, what better time to take a moment and say a heartfelt thank you to all our clients!
Even though our market constantly fluctuates, one thing that remains constant is our relationships with you. You come to us for fair and honest insight into the market and for help buying and selling things that mean a lot to you, and that means a lot to us.
This year also marked some important milestones for us. It was our 20th year in Canada, Christo’s 11th anniversary as a Realtor, and Janette is quickly approaching her 20th year as a Realtor in Canada (she was also a Real Estate Agent in Cape Town).
Let’s talk about what happened in the month of September:
There’s a change in the air. While inventory levels have climbed once again, we’re also seeing sales pick up in freehold homes. This is because many buyers are recognizing the value in today’s buying environment. At the same time, sellers are finally facing the reality that the market is not as strong as in previous years, and they are making more concessions for buyers.
If we reflect back to 2023, it was a year marked by low listings and low sales. Homeowners and investors said: “If we can’t sell for a good price, we will wait until interest rates come down.” While prices haven’t shifted much since last year (down 1%), many of these homeowners seem to have decided it’s time to list.
This past month saw 8.5% more sales than last September. However, the increase in sales volume was offset by a 10.5% rise in active listings. We’re now sitting at 25,612 active listings, which is 35% more than last September and 56% above our 10-year average.
This is pushing us deeper into a buyer’s market, with freehold homes sitting at 4.4 months of inventory, and condos at 6.6 months. That means if we stopped listing condos today, it would take over six months to sell the existing inventory—this is the highest level of condo inventory in a decade.
We think this backlog of listings is due to two main reasons: first, many would-be buyers have their equity tied up in homes they worry might not sell, so they’re don’t want to risk buying right now. Second, much of this inventory is sellers who delayed listing their home in 2023 because they hoped 2024 would be a better market for them.
Where we’re headed:
There are only 2.5 months left in 2024, and they are historically quieter times in the market. However, with the recent 50 basis point drop in lending rate, and the possibility of two more drops before spring, a lot can happen.
If November and December follow historical trends, we will likely see a drop in active listings as homeowners take their homes off the market for the holiday season. These homeowners often relist in spring when buyers re-enter the market.
We’re currently sitting at a 3.75% interest rate, and home prices are below their average from when the interest rate was 5%. That means buyer’s affordability has improved, but we haven’t seen buyers take advantage of this yet. Pair this with the new mortgage rules coming into effect in Dec 15, which gives first-time buyers with insured mortgages an extra 5 years amortization on insured loans, and we should have the base for more first-time buyers to enter the market.
In summary, we are in a slight buyer’s market for freehold homes and a more pronounced buyer’s market for condos. However, with two more anticipated rate drops in December and January, we believe there’s a higher chance of prices going up by spring compared to prices coming down.
It’s rare to experience a buyer’s market in the GTA, so if you’re in a position to make a move, now is a good time to consider your options.
Warmest regards,
Christo and Janette
