Minor Correction, or Something More?
Why isn’t your house selling? Well, it’s been hard to miss the change in real estate markets over the past year. Since the recent peak and subsequent fall in prices over this time, both home buyers and sellers are questioning the profitability of real estate for the next little while.
Nowhere is this more apparent than in the Toronto condo market. Before, market strength and investor interest would push prices upward and see new developments sell out shortly after release to the public. Condo resale prices rose and investors saw both positive appreciation and cash flow.
With the subsequent slowdown in the past year, these conditions are in the midst of change. Mortgage legislations have made it difficult for buyers to qualify for their ideal home, investors are losing interest on account of high carrying costs and inventory is on the rise. Investors have become more inclined to sell after years of positivity – this extra inventory, coupled with an influx of new developments and general market conditions have caused listings to remain on the market for longer periods of time.
For buyers, these changes come with welcome incentives – among them, fewer multiple offer situations and more time to choose the right property. Developers of new construction projects are offering discounted parking and more attractive deposit structures. In the resale market, buyers have more selection and the ability to negotiate conditional offers.
Depending on the nature of this correction, prices may level or even begin to fall for the first time in years. With investors searching for greener pastures, perhaps first-time homebuyers and end users will finally have their chance to enter the Toronto real estate market. Is this the trend toward affordable housing that prospective Toronto buyers have been looking for? One can speculate, but only time will tell. In the meantime, try to not worry too much about why your house isn’t selling.