Historic Low Sales in the Toronto Real Estate Market

The Greater Toronto Area is experiencing a real estate slump reminiscent of the 1990s. Recent statistics point to March sales figures hitting their lowest mark since 1995, a trend that has many experts buzzing.

Buyers Hold Back While Inventory Grows

Economist Daren King from the National Bank of Canada attributes this decline to market uncertainty, amid concerns like trade wars, fluctuating stock markets, and a looming federal election. Though buyers haven't completely disappeared, many are hesitating to make moves.

Despite the cautious approach of buyers, homeowners are still listing their properties. Christopher Bibby, a broker with Re/Max Hallmark Bibby Group Realty, reports a notable increase in listings, indicating that supply is starting to overwhelm demand.

The Lowball Bidding Dilemma

Sellers are currently facing a barrage of lowball offers from buyers eager to strike a deal in this fluctuating market. For instance, in Little Italy, a townhouse initially priced at $2.249 million saw bids as low as $1.9 million. Following a patiently orchestrated negotiation, it ultimately sold for $2.09 million.

The Evolution of Seller Expectations

The disparity in seller expectations is stark. Individuals who purchased homes decades ago are still enjoying considerable gains, while those who bought in the recent boom of 2021 and 2022 may face losses due to renovations and land transfer taxes. Bibby warns sellers that if they have set financial goals, they should avoid testing the market.

Sales Drop and Unsold Inventory Grows

According to the Toronto Regional Real Estate Board, March saw a 2.4% dip in sales from February, building on February’s staggering 28.5% decline from January. Active listings spiked by 1.6%, marking a continuous rise for the twelfth month—amidst a staggering 88.3% increase compared to last year.

New Strategies and Eye-Catching Listings Emerging

In light of the increasing inventory, some sellers are setting ambitious asking prices. For example, a bachelor unit at 161 Roehampton Ave. was listed at $399,000, poised to attract buyers with its potential for conversion into a one-bedroom.

Declining Interest Rates and Buyer Demand

Declining interest rates are providing fresh opportunities for first-time buyers. With a surge of properties on the market, Bibby is moving aggressively with new listings, capitalizing on the current environment of buyer flexibility and negotiation.

Navigating an Uncertain Market

As properties continue to change hands, market dynamics reveal that buyers are increasingly willing to negotiate. Instances of successful sales are occurring, especially in desirable residential units, as the influx of new listings stirs renewed activity.

Overall, while certain segments of the market are struggling, particularly with investment-oriented small units in downtown towers, appealing properties are still generating interest. March showings remained brisk, and Bibby is optimistic about April amidst a less-than-ideal weather forecast.