The market has shifted DOWN by 11%!
In January, February and March we all witnessed record increases in home prices.
Over the same period last year, home prices for…
- January were up by 36%
- February were up by 39% and
- March were up by a crazy 43%!!!
However, for April the increase (over April last year) was 32%...which is still fantastic but the reality is that home prices DECREASED by 11% from what they were in March.
Why did home prices drop by 11%?
I study the market closely, and for sure there are several factors that have contributed to an 11% decrease in home prices. But, the one thing that jumps off the sales data sheets is the HUGE increase in the number of listings. Just look around your neighbourhood, I’m sure you see more For Sale signs.
January and February this year the amount of listings vs the same time last year were down by 16% and 21% respectively. Buyers were competing for the one or two properties for sale in your neighbourhood. But March this year had a 28% increase in listings and April had a whopping 58% increase over the same period last year.
It all boils down to economics 101…Supply & Demand. We know the demand is there but when supply is low, as it was in January, February and March, this forced the prices up, and in our case, way up. But when the supply increases, as it has in March and April, and buyers have more choices, then the prices come down.
What’s happening next month?
Well, I can’t say for sure, although many people will be ready to predict the future to you. I do see the trend in lower prices continuing for May. What will happen in June, July, August? That all depends if the flood of listings continues or gets bought up quickly and then we’re back to a shortage. I’m watching this closely for you.
How does this affect you?
A quick and simple answer is, if you are Selling now, then you are still taking advantage of a 32% home value increase over what homes sold one year ago.
If you are Buying now, then you are paying 11% less than what a home sold for last month.
Every selling and buying situation has its own unique circumstances. We should have a chat to see what makes sense for you to do. The right move could mean thousands more in your pocket.
The numeric examples I refer to in this blog are for the Vaughan area for detached homes reported on the Toronto MLS. I do see similar examples across the GTA.
I’d be happy to share with you the numbers for your particular neighbourhood…just call or text me.
I hope you found this information timely and informative. With the correct information, on time, you are better prepared to make good real estate decisions.