As Toronto’s once-buzzing real estate market continues to show signs of cooling, one realtor says sellers are getting “desperate.”
Brett Stein of Toronto-based Stein Realty Group said those looking to buy a home now have more bargaining power as low offers become more common.
“Right now, I mean, the table is open for negotiation. Low offers are coming in on homes hundreds of thousands of dollars below asking price, and as a seller, you can’t be offended. You have to play ball,” he told CTV News Channel on Thursday.
Stein said the so-called ball is now in the buyer’s court.
“So if you’re a buyer and you see something and there’s not a lot of competition, act fast and that will give you a lot of opportunity to negotiate. A lot of people are desperate to sell right now because they’ve already bought their next home and in order to get that financing, they need to sell and they need to sell fast.”
On Wednesday, the Toronto Regional Real Estate Board said home prices in the GTA fell for the fourth consecutive month in June by just over 41 percent compared to the same month last year. About 6,500 homes sold in the Toronto area last month compared to just over 11,000 in June 2021, TRREB said.
Home sales in June 2022 also decreased compared to the previous month, as an inflation rate of 7.7%, coupled with high borrowing costs, continue to weigh on the market. With the latest interest rate increase on July 6, fixed mortgage rates are now over five percent, up from less than two percent previously.
“Obviously that’s a big disparity, a big change in a short period of time. Of course, as interest rates rise, monthly payments rise and buyer confidence declines. And as we continue to see rates go up and more hikes will continue to happen,” Stein said.
With that in mind, he said his “number one” advice to potential buyers is to sell your current property first, then buy your new one.
“In the frenzy of the market, everyone was buying first because they knew their property would fetch a fantastic sale price,” Stein said.
“Now, with things a little more up in the air, first sell, now how much money are you going to put in your pocket? That way, you can budget accordingly for what you’re going to buy.”
Stein said those buying or selling their home should “do the math.”
“If prices are going to keep going down, how much are they going to keep going down? If you get a $50,000 discount, how does that compare to a 1 percent increase in your interest rate? So you need to know what your numbers are and how much you can pay monthly,” he said.
“Create that plan with your real estate agent so you can move forward and take advantage of the opportunities because for buyers right now there are opportunities that you can capitalize on. You really have to, you know, make a conscious decision to wait for the opportunity, instead of waiting indefinitely until a news article comes along saying you should go out and buy.”
Stein also said it might not be the best idea to sell your condo right now as the market for this type of housing is “cold.”
I have multiple listings. I know agents all over TRREB that have multiple listings that are sitting that don’t get the kind of showings that we’re used to and buyer confidence for condos as they continue to build more and more of these skyscrapers demand is low on right now,” he said, urging people to keep their condo and rent it, or “adjust their price expectations to sell.”
-with files from The Canadian Press