May 2024 Newsletter

Real Estate Market Report

GTA March Stats and 2024 Market in review

TORONTO, ONTARIO, April 3, 2024 – March 2024 home sales reported through TRREB’s MLS® System were lower than the March 2023 result….. Despite a better-supplied market compared to last year, there was enough competition between buyers to see a moderate increase in the average March home price compared to last year’s level.
“We have seen a gradual improvement in market conditions over the past quarter. More buyers have adjusted to the higher interest rate environment. At the same time, homeowners may be anticipating an improvement in market conditions in the spring, which helps explain the marked increase in new listings so far this year. Assuming we benefit from lower borrowing costs in the near future, sales will increase further, new listings will be absorbed, and tighter market conditions will push selling prices higher,” said TRREB President Jennifer Pearce.
The MLS® Home Price Index (HPI) Composite benchmark was up by 0.3 per cent year-over-year. The average selling price was up by 1.3 per cent to $1,121,615. On a seasonally-adjusted month-over-month basis, the MLS® HPI Composite was up by 0.2 per cent and the average selling price was up by 0.7 per cent compared to February.
“The average selling price edged up in comparison to last year as we moved through the first quarter of 2024. Price growth is expected to accelerate during the spring and even more so in the second half of the year, as sales growth catches up with listings growth and sellers’ market conditions start to emerge in many neighbourhoods. Lower borrowing costs in the months ahead will help fuel increased demand for ownership housing,” said TRREB Chief Market Analyst Jason Mercer.

If I was to sum up “the market” in one word, it would be “consistent.” Despite much angst about the direction of interest rates and the corresponding affect on housing prices, one factor alone has stabilized the market: low inventory. There aren’t the bargains buyer clients have been waiting for (with one possible exception: condo apartments in some areas) and sellers worrying about the possibility of falling prices have heaved a collective sigh that prices are consistent.


Across the GTA we are seeing an increase in the number of listings being marketed with “plunge pricing” and offer dates. This strategy hopes to amplify the competition among buyers and create bidding wars by: a) drawing in a larger pool of potential buyers with an artificially low listing price; and b) force all buyers to submit offers on one particular day, almost guaranteeing there will be competing bids.
 
Approximately half of all detached listings are starting to use this marketing strategy, and many lower-priced segments of the market are taking advantage of the lack of affordable property options to employ this “auction house” method of maximizing the sale price.
 
Given these market realities, some buyers naturally balk at the idea of having to compete for a property. To this I would advise:
1. Let’s develop a game plan that rebalances the odds of your offer being accepted;
2. Prices are only going to increase so waiting it out won’t be to your advantage;
3. Your highest price needs to be determined in advance so that emotion does not overrule your budget.

To sellers who might feel that this strategy is somehow duplicitous, let me assure you that when a buyer’s agent sees a listing with a price that seems too good to be true, and the broker comments indicate that there is an offer date, that Realtor knows the strategy being employed. In traditional pricing strategies, we determine fair market value and then add a bit to the list price to allow for negotiation. The seller’s agent then negotiates a price that is as close to that “ceiling” price as possible. With the bidding war strategy we are setting the”basement” price and allowing the market to determine the upper limits of what this property is worth. Remember: no matter what pricing strategy is used, the market always decides for itself. Overpricing your property will have the marketplace voting with its feet…Next! As your Realtor, my first priority is establishing a correct price point and from there we decide what pricing strategy to use together. There are strengths and weaknesses to both approaches, and these need to be understood to determine the correct course of action.