There are countless theories that the sun, and the seasons, have a tremendous impact on the emotions of our species. It seems that with the turn toward spring, and the promise of warmer days ahead, the panic in the market has significantly decreased. No longer are listings being splattered against the MLS in a desperate hope to beat out some pending Armageddon. No longer are home owners feeling coerced into selling immediately. Does all this mean that happy days are here again? Well, no. Not exactly.
While the countrywide, continent-wide, recession remains a serious hindrance, and while I do believe that in our market sector the real estate market will be the first to rise from the ashes, I don’t yet believe that time is upon us. What is upon us is imminent stabilization in the best parts of the GTA.
One of the indicators I’m fortunate enough to have at my disposal is the length of time it takes me to successfully sell an above average condo, in Downtown or North York. Priced at the higher end of fair market value, but still fair enough for the buyer. A commonplace occurrence from 2007-2008 has resurfaced. In the past few weeks two condos of mine have been successfully listed, marketed and sold, within the span of 48 hours. That is a very real, down to earth, sign that consumer confidence, at least in certain segments of the market, is on the rise. Rise in consumer confidence is smoke, and stabilization is the fire. Of course the return to warmer temperatures is a contributing factor, but the level of change in the market, in my humble opinion, cannot be attributed to just Mother Nature dawning her light spring jacket alone.
To be perfectly clear, again, by no means am I suggesting that the market has made the 180. However, the reality is that condos and houses that would have remained on the market for several weeks, perhaps months, are now selling in a relatively shorter timeframe. Why? Confidence is up. Panic is down. It is just as important to understand that the prices we’re talking about remain significantly lower than those of one or two years ago.
So, what does this mean for Buyer Erica? It means that she may realize that being prepared to move fast is becoming important once more. Chances are the home she finds suitable, especially if Erica is looking for that model type home, will not last for a few weeks, as it may have a few months ago. If she felt she could afford to not sort out her finances prior to the actual offer’s conditional period before, now she may want to revisit that notion. Depending on the expertise of her realtor, she may choose to accept a slightly higher bottom-line price, if she likes the home that much, because the chances of finding a “better deal” are not just as high as they were a few months back.
Seller Mike should understand, even better now, that he’s certainly not in a position where he must sell. There is no severe market crash on the horizon. The stock market and the real estate are just two totally different animals. Mike may choose to dress his home up with the aid of a staging company because the times of multiple offers, while not present, are not as far off as many think. Properly listing and marketing a home can finally attract a better dollar again, whereas a few months ago the buyers dictated the ultimate sale prices much more exclusively.
Having said all of that, make no mistake, there are still valuable “deals” available. In no way are prices on the rise — prices have stopped dropping into a bottomless pit. For instance, there are two properties currently not on the market, but available, which can be had for what I would conservatively consider $40,000 below fair market value, in the range of $350,000. The vast majority of A-class condos in Downtown remain seven to 10 per cent below 2007-2008 levels. In some cases more. Homes in some of the GTA’s finer suburbs also continue to share those percentages. The point to be taken away from all this is, if you’ve been waiting for the bottom to fall out of the barrel, you may want to consider waiting no longer. Happy Spring and Happy Hunting!
Amit is a Realtor/Developer with Re/Max. firstname.lastname@example.org