Navigating the Toronto Spring Real Estate Market for 2020

05 March 2020
Ela Napiorkowski

Navigating the Toronto spring real estate market in 2020 is going to be competitive for home buyers.

We’re now in March, with spring just around the corner. The sound of birds chirping is becoming more commonplace; days are getting longer; there’s more sunshine – and rain. Growth is on the horizon. Growth, in terms of plants and flowers, but not so many growing opportunities for those looking to buy in the Toronto real estate market this spring.

While condominium buildings are going up at a furious pace in downtown Toronto, they are not in fact being built fast enough. The city’s population is growing faster than the housing being built, and this is making the Toronto spring real estate market a very good one for sellers, and a very competitive one for buyers.

If you’re entering the Toronto real estate market this spring, then let me, Ela Napiorkowski, Real Estate Broker for RE/MAX Professionals Inc. Brokerage, lead you into the market, armed with the knowledge and experience of a real estate professional who is able to navigate a difficult and exciting market, such as this spring’s real estate market in Toronto.

A look at the Toronto spring real estate market

For the better portion of a year, Toronto has been in what mayor John Tory has called the “busiest” construction period the city has ever seen. $1 billion worth of construction projects are underway, with many more surely in the works.

Not all of this construction is housing, of course, but the city has been building housing projects, in particular condominium buildings, at a rate previously unmatched. And yet, they are not nearly being built quickly enough.

Looking at the January market, home sales increased dramatically from last year, with an increase in sales of 15.4% year-over-year. That is a huge hike, and a sign that the Toronto real estate market has left the slump of last year’s sales well behind it. While the increase in sales may suggest a friendly market for buyers, that suggestion is quickly erased by the fact that the supply of new listings in January had an even more dramatic decrease, by -17.1% from last year.

The lack of supply in the Toronto market has led the overall average cost of a home to rise by 12.3%. If housing in Toronto was expensive before, then it is even more so today. Supply is down, and costs are rising as a result. Couple those facts with low interest rates, healthy employment levels, and active buyer segments all round, and it is a very competitive market for buyers, and a very friendly market for sellers in spring, 2020.

Navigation for sellers

While the market should be friendly to you if you are selling your home, this does not mean you should just sit back and hope to collect a big cheque at the end of the process. There’s work to be done when buyers are in an uber-competitive market.

As a seller, you are still looking to sell at the best possible price, and this means being on the ball and positioning your home as a premiere listing on the market. This means, first, that you shouldn’t waste any time going to market: you want to get out there as soon as possible, before the market turns back to balance. Indeed, spending more time to beautify your home is a good idea in a buyers’ market, but the opposite is true in a market like this one. Instead, get it to market quickly to take advantage of your position sooner.

Don’t overprice your property either. A market conducive to selling does not mean that buyers are gullible, and overpricing your property will only decrease the number of interested buyers. In fact, it may even keep your home on the market longer than you would like, and that will only raise flags to buyers, knowing the property has been listed for so long. Rather, pricing your home at or just below the fair market value will allow you to play buyers off each other. You’ll encourage interest, and then bidding wars, increasing your sale price in process.

In a market like this, moreover, I would not suggest accepting pre-emptive (“bully”) offers. The practise itself is becoming less popular (for a myriad of reasons), but in a market that is highly competitive for buyers, presenting yourself as a “fair” seller, one that will review each offer separately, will encourage bidders and allow the competition inherent to the market to do its work for you.

Navigation for buyers

As it is for sellers, do not take your time as a buyer either. Start your hunt as early as possible, and keep yourself up to date on everything going to market: when properties go to market in a climate like this, they typically do not stay on the market very long. Being on top of the market will allow you to act quickly when the right property becomes available.

Acting fast means that you also need to be prepared, so securing the proper funding (and the evidence you have it) and a pre-approval is absolutely paramount to you being able to present a bid that can win. You typically only have a day or two to submit an offer in a hot market like this, and having all your ducks in a row is necessary for a successful bid.

Remember, that in a market like this your bid is likely to be competing with many other bids. Winning bids aren’t necessarily the highest. Contingencies to offers (like inspections or mortgage commitments) can put your offer at risk, as sellers can see contingencies like these as deal breakers. My suggestion then is to make any bids as ‘clean’ as possible with regards to contingencies.

Of course, money speaks the loudest, so when making an offer in a competitive market, never low-ball. Always put your best foot forward on a property that meets your housing requirements, or you are unlikely to win the property you want.

As a final tip for buyers, writing a personal offer letter can have a great benefit for your bid. Sellers are likely reviewing numerous offers this spring, which, at a certain point, are all going to start sounding very similar. To stand out, a personal letter to the seller to accompany your offer and explain why you are the perfect person or family to move into their home can elevate your offer to the top of the pile. It may not do a thing, but it certainly won’t back fire – it may be the difference maker though.

Whether you’re a buyer or a seller in Toronto’s spring real estate market, the challenging landscape means that a real estate broker is a huge benefit to navigating the market successfully. Call me, Ela Napiorkowski, your Real Estate Broker for RE/MAX Professionals Inc. Brokerage, (416) 841-2356, as my experience and knowledge in the industry is sure to lead you to achieving your real estate goals this spring in Toronto.