The Toronto real estate market is experiencing a fascinating shift as we approach the end of summer 2024. The narrative of sellers holding firm on their prices with the intention to rent if they don’t achieve their asking price is becoming increasingly common. However, the reality often tells a different story, as many sellers find themselves returning to the negotiating table after weeks of holding out.
The Reality of Selling vs. Renting in Toronto
Throughout the summer, I’ve encountered numerous cases where sellers, confident in their asking prices, decided to turn down offers with the belief that they could simply rent out their property if their price wasn’t met. This approach is widespread, but the financial feasibility of switching from selling to renting is often overestimated. In reality, only a small percentage of sellers can genuinely afford to make this choice, despite many claiming otherwise.
For instance, I was recently involved in negotiations for a property where the seller initially refused our offer, asserting that they would rent the property instead. Fast forward a month, and the same agent contacted us, now open to considering our previous offer. This scenario has played out multiple times, with sellers who were once confident now more willing to negotiate as the end of summer approaches.
Market Trends and Insights: Week Ending August 21, 2024
Let’s dive into the latest data for Toronto’s Freehold market, specifically focusing on detached homes, semi-detached homes, and townhouses. Here’s what the numbers tell us:
Detached – Sales Volume:
93 detached properties were sold during the week ending August 21, 2024. This is a low number, typical of long weekends or holiday periods like Christmas.
– Price Trends: The average sold price for detached homes has risen to $1,731,000, marking a 10% increase compared to the same time last year. The median price also saw a slight increase of 1%, now at $1,379,000. Despite these price increases, only 37% of these homes sold at or above the list price, a notable decrease from the mid-50% range seen earlier this year.
– Listings and Inventory: Toronto saw 250 new detached home listings, consistent with the previous week. However, active listings are slightly up, contributing to a rise in months of inventory, which now sits at 4.6. Typically, an increase in inventory would lead to lower prices, but for now, prices seem to be holding steady.
Semi-Detached Homes:
– Sales Volume: A total of 23 semi-detached homes were sold, with four of these transactions exceeding the $1.5 million mark.
– Price Trends: The average price for semi-detached homes has climbed to $1,225,000, but this figure is 10% lower compared to last year. The median price, currently at $1,150,000, reflects a 9% decrease year-over-year. The overall trend for semi-detached homes shows prices gradually declining.
– Inventory: Months of inventory for semi-detached homes have increased to 3.7, signaling a potential for further price adjustments as more properties become available.
Townhouses:
– Sales Volume: Only nine Freehold townhouses were sold across Toronto during this period, which is strikingly low.
– Price Trends: Despite the low volume, the average price for townhouses reached $1,134,000, while the median price hit $1,215,000. However, due to the small sample size, these figures might not fully represent the broader market.
– Inventory: The months of inventory for townhouses now stands at 5.2, indicating a shift towards a buyer’s market in this segment.
The Takeaway for Toronto Home Sellers and Buyers
As we move towards the fall, many sellers are banking on a robust market, but it’s essential to remain cautious. The influx of new listings expected in the fall could lead to increased competition, potentially putting downward pressure on prices. Sellers should carefully consider any offers they receive now, as rejecting them could mean facing a more challenging market in the coming months.
For buyers, this could present an opportunity to negotiate better deals as the market adjusts. However, it’s important to stay informed and work closely with a knowledgeable real estate agent to navigate these changes effectively.
If you found this market update helpful, consider sharing it with others who might benefit from this information. For personalized advice or to discuss your real estate situation, feel free to reach out to me directly by booking a consultation through the link below.
Stay tuned for tomorrow’s update, where we’ll dive into the condo market across the GTA.
Have a great day!