In case you haven’t realized, it’s the middle of February. I know the robin I saw the other day didn’t realize it. No, this isn’t your typical winter. Well, at least not yet I guess.
But we’re not out of the woods yet, as we could still get whacked by Mother Nature and Old Man Winter, given that they seem content in keeping us on our toes as to what we wear outside these days.
We are creeping ever closer to March, and the days are getting longer. As such, the Beach real estate market typically begins to stir right about now, stretching out toward the early spring market of the month of March, and into the typically busy spring market months of April and May. This ‘soft’ winter has made the months of December, January and February feel a lot like March in many respects, and has been somewhat responsible for the early start to the spring Beach real estate market. So I thought this might be a good time to bring you up-to-date on what’s been happening ‘Beach-wise’, and just where Beach real estate may go in the coming months.
Buyers laced up their open house shoes instead of their winter boots in January, and have hit the open houses en masse these last few weeks, just like they would more typically in March when winter is diminishing. You may have heard through agents and the media that there wasn’t much of a listing inventory for buyers to choose from. Actually, there were more listings this January than was the case in January 2011. There’s just more buyers out looking earlier this year, perhaps because weekends aren’t filled with winter activities that involve snow, or shovelling snow, and driving has been a breeze.
In January 2011, in the Toronto Real Estate Board market area of E02 that encompasses most (but not all) of the Beach neighbourhood, there were 27 sales of the 57 properties of all types on the market with a median price of $564,000.
This January, that inventory increased to 60 listings with 45 of those properties selling, with an increase in the median price to $582,000. The average price this January actually declined because of the increase in sale units to $594,198 compared to the January 2011 average price of $629,559. Of course, in taking such a small sampling of sales within only the Beach, just one or two high-value sales can skew the average. But you can see that without the usual winter weather or weekend snowstorms and their cleanups to deal with this winter, buyers were out shopping in January. And the resulting bidding wars on some properties reflected this.
Of course, the continuing historic low interest rates and some terrific incentives by major financial institutions just pushed more buyers through doors earlier than usual.
This February that trend has continued, with more buyers shopping like its an early spring market, but finding out that there’s only the inventory of a typical February to greet their enthusiasm. Although there are more properties for sale in a typical February than in a typical January, inventories this February haven’t been able to keep pace with the amount of buyers who are thinking they’re getting the jump on the market. That will soon begin to change, and buyers sense this. Many of the buyers I’ve spoken with will jump at a property now if it pushes many of the buttons on their list.
But they’re also being a little more prudent too. They know that there will be an increase in listings just around the corner, when the early spring market hits. They know that there’s more than a few sellers pushing up their listing timetable hoping to catch the heat of this winter’s market, and beat other sellers to the buyer’s table. And this is reflected in the sale prices in bidding wars.
With the exception of a few more than generous offers on homes in competition in the E02 Beach area, I’ve noticed that there seems to be some level of sanity creeping into buyers’ minds. There have been some recent sales that have left many of us shaking our heads because of the sale price, but there have also been sales these past few weeks in the Beach area that didn’t go to heights that indicate a market going crazy. More than a few buyers are drawing that line in the sand, perhaps not willing to pony up the cash for the sake of getting the property at any cost, knowing or hoping that another similar property is going to hit the market when the typical early spring and spring markets roll around.
There’s also no pressure to buy right now because of mortgage rates increasing drastically any time soon. The affordability factor will knock down the competition between some buyers as well, especially in the Beach entry-level homes, as some buyers just can’t keep up with this market. Some will take to the sidelines and wait, or turn to alternatives such as condos.
In the short term, I believe we’ll see an increase in Beach listing inventory through to the spring market, especially in the $600,000 to $900,000 price ranges, and eager buyers for those properties. And with that, there will be a moderate increase in prices, but not in percentages we’ve witnessed in the past few years.
As well, because many Beach sellers in those price ranges do like and tend to stay within the Beach neighbourhood, we’ll see an increase in unit sales of the upper end of the Beach market, in the $1,500,000 plus range, especially with properties in choice locations and on preferred streets. All in all in the short term, don’t look for a slowing Beach real estate market, but perhaps one with more balance, and sanity.
If you have any questions or comments about this article, or about Beach real estate in general, feel free to email me at tneal@trebnet.com, or call my office at 416-690-5100. Take care.
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