The numbers are in! The first quarter of this year brought in an increase of 15.8% in sales as compared to a similar period in 2015. A strong March anchored this year’s first quarter jump in sales and home prices says TREB.
The competitive Greater Toronto Area real estate market is getting more competitive by the day. Real estate agents are reportedly closing deals at $300,000 more than a property’s asking price and sharing that these days, bully offers like that are becoming the norm.
Full Swing Bully Offers
In what could be the busiest market in GTA history or at least in the past 30 years, the first quarter of 2016 proved to be a strong start to another year of double-digit increases in real estate prices. Real estate agents are reporting that buyers are becoming increasingly aggressively and would often competitively bid for the few homes that are currently on the market.
Royal Lepage agent for upscale central Toronto, Elli Davis says that the lacking housing supply is what has been pushing buyers to send-off tempting offers even before sellers are open to accepting bids. This action, which goes by the term ‘bully offer’ is in fact, getting more common. Buyers are offering to purchase properties at a few hundred thousand dollars above the asking price and no one is batting an eyelash!
March Real Estate Craze
March marked a 16.2% increase in home sales and was actually responsible for around half of the 22,575 home sales that took place in the first quarter of the year. Average home selling prices in GTA went up by 12.1% and is now at $688,181.
The even more shocking part of this news is that the numbers could have been a lot higher if only there were more homes up for grabs, as shared by TREB Director of Market Analysis Jason Mercer. He further said that March could be the start of another record-breaking year with sales soaring to heights that they’ve never been before if only listing can keep up with the demand.
New listings are currently down compared to a similar period last year, making the real estate market more cutthroat than ever. A National Bank analysis stated that the number of available homes in the first quarter of 2016 is the lowest it has been in 12 years. With the home-buying situation like this, can we blame buyers for going for a full-blown bidding war?
The average price for a detached home soared to $910,375, a lot closer now to the $1million mark. Even real estate agents like Davis are expressing that they’re astounded. Half of her own listings are between $3.5 million and $16.8 million.
A Seller’s Market
BMO Senior Economist Robert Kavcic shared that sales-to-new-listings ratio in Toronto is at about 70%, making it a seller’s market with a ratio that’s never been this high since the 2008 to 2009 recession. He adds that he does not see the demand abating soon, especially that jobs and population in GTA are on the rise.
Real estate agents are saying the relatively mild winter could be a factor, as well as existing mortgage rates. Some agents state that this year has been the busiest they’ve been since 1989.
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