Toronto buyers and sellers are forgiven if they feel confused. Last week, the market was frozen. This week? We’re back, baby. Listings are slightly up in the GTA and buyers are ready. Many houses are selling with multiple offers and well over list price. I showed a bungalow in Long Branch last weekend that got nineteen offers and sold for 200k over asking, for example. This would have been unimaginable two weeks ago.
The question we are getting over and over again from our clients is: Is it possible that COVID didn’t affect the Toronto market at all? The answer is that it is too soon to tell. It seems like CMHC (the federal agency that insures high-risk mortgages) is preparing for a five percent correction in prices- more on this later when we know more. Five percent in Toronto isn’t enough to sink a market that has so much pent-up demand. Likely, even with a 5 percent softening, we’ll get it back pretty quickly.
So, what is happening right now? As I mentioned in a previous post, the market is affected by three factors: mortgage rates, employment rates, and consumer confidence. The first two are steady. Mortgage rates have gone down, which causes prices to go up. Employment rates in high-wage sectors across Toronto are also steady (although anecdotally we know that a lot of those employees are facing some income reduction). Consumer confidence, the most mercurial of the market factors, is undaunted for now. If in the future any one of these three factors is impacted by COVID-19, the market will likely change. For now, so far so good.
- Robyn VanderVennen
The Kim Kehoe Team