Is Toronto the new Miami?

One sale for every 20 listings!

I just came back from Miami. In the super-inflated, runaway housing era, when money was easy and almost free, they built 20 years’ worth of inventory. When the market collapsed, there was suddenly a high volume of unsold properties to choose from and not enough people to buy them. Entire buildings, like this one, – I call them “ghost buildings” – are sitting vacant.

One of the agents I spoke to told me that in her county, there were 3,330 listings last month and of these only 162 actually sold. That works out to 1 sale for every 20 listings. The competition for buyers is fierce, competition among the sellers is fierce…and so is the downward pressure on the prices.

Now let’s take a look at what is happening in our market.

We all read the papers and listen to the news. We know our market is down by 21%. Overpriced and overheated, the market is heading for a major correction, right? Wrong. Yes, the number of sales is way down, but here is the major difference between our market and the US: there are 30% fewer buyers, but there are also 50% less properties for sale.

No question, our real estate market is a lot quieter now; however, it’s not because no one is buying, but because there isn’t much to buy. This is not only keeping the prices at their current levels, but in some areas, it is actually pushing prices even higher. Any decent home that is not outrageously overpriced attracts a lot of attention, showings, offers and ultimately a good price.

Mark my words: come spring, once all the uncertainty around HST (believe it or not, 69% of all buyers still think that HST applies on resale homes), bad media publicity and all the worries about the lingering US recession has died down, we will see a very brisk and healthy market. Price declines? Extremely unlikely in my view. Perhaps some levelling, but I wouldn’t be surprised if prices continue to climb, albeit not at the double-digit rate.

What does this all mean to you personally? If you are planning a move, timing is a very important factor to consider; “Sell high, buy low” – we’ve all heard it, but how does one do it? Simple: for a seller, less properties to choose from means higher competition among buyers, which translates into a higher selling price and an easier and faster sale.

The key is to negotiate a very long closing, say 90-160 days, which will allow you to shop for a home right into the spring, at which point we should have more to choose from.

I am happy to discuss strategies with you. Feel free to call or email me. 

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