What can we say with certainty? Snow, freezing temperatures, or lockdowns won't be able to dampen Toronto property buyers' enthusiasm. The Toronto real estate market is at its hottest point in history (and we've seen a lot).
Here is what you should be aware of in order to be ready if you're looking to purchase a home in Toronto soon:
Surprisingly Low Inventory of Homes for Sale in Toronto
Every January, we observe the same pattern: many eager and motivated buyers and sellers hold off on listing their properties until later in the spring.
With listings down by 60% in December 2021 compared to December 2020, we face an even worse inventory situation this year. Top real estate agents in Toronto suggest that this is a good sign for home buyers looking to purchase affordable homes in the GTA area.
Interest Rates are Higher (Positive for Buyers)
Interest rates will likely increase in 2022 after a few years of record-low rates. In fact, according to some experts, the Bank of Canada will raise rates in a sequence of three to six times this year.
Pro Tip: Even if interest rates are beyond of your hands, you may make sure that you're locked into a rate that you're content with. Ask your lender to provide you with a rate guarantee (which is typically valid for 90 days) as well as a written pre-approval.
Remember, Higher Interest Rates Don’t Always Guarantee Lower Home Prices
Three things typically happen when interest rates rise:
- There is a rush of purchasers rushing to purchase a home before their pre-approval expires, which increases short-term demand and intensifies bidding battles, particularly among first-time buyers.
- The inventory problem will be alleviated if some sellers offer their properties for sale sooner rather than later, but the power disparity between buyers and sellers will still exist. Keep in mind that the majority of sellers also purchase, so when they sell, they also go out and buy.
- Even when they had to make a compromise and purchase a smaller property or in a less desirable location than where they were looking, buyers who were already at the top of their price range don't simply vanish from the market.
When is the Right Time?
If you're now looking to buy a home, you must be prepared to act quickly due to the market's extraordinarily rapid movement. That implies:
- Clearly defining your must-haves and must-have-nots can help you narrow your search (and ensure that you and your spouse both are convinced).
- You can make an offer without a financial condition if you have your financing in planned in advance and are dealing with a lender that can give you the confidence to do so.
- Being able to access a down payment quickly (usually 5 percent of the purchase price). Consult your lender about additional choices if your deposit isn't liquid. You should also discuss this with your real estate agent Toronto.
- Being prepared to make this heavyweight financial decision.
Waiting/procrastinating can cost you Money
Many customers have opted to "wait" throughout the years in the hopes that prices will drop. Never did it work. In Toronto, it is practically hard to save money at a rate quicker than costs are rising, and when interest rates are taken into account, things may get very costly quickly.
If you’re looking to buy a home in Toronto, Brampton, or other GTA areas, then RealtorGroups.Ca is the best site for you. They work with the top real estate agents in Toronto and have built a great reputation in real estate over the years.
