It’s a buyer’s market, for the most part. This is consistent in the Oakville real estate market, as well as the higher priced segments in Mississauga, Burlington and Milton. We measure the health of the market based on the most recent sales activity (30-day unit sales) compared to the number of active listings at a given day. As you see in the chart (categorized into Seller’s, Balanced or Buyer’s markets), market segments are performing at far different levels.
In early October, TREB reported that average prices in the GTA have risen 6% YTD in 2019. If we tell that to 76% of listed clients in Oakville with properties over $1m, they will be cynical.
The fact is, inventory has ballooned in particular price segments. Government policies to tighten credit have had the most significant impact on the demand for higher priced homes.
Here’s a breakdown of segments in the west GTA area (Mississauga, Oakville, Milton and Burlington):
- Under $1m: These markets have performed well. This is the segment that has contributed most significantly to the 6% market growth as reported by TREB. A staggering 80.2% of the sales volume in September is in the under $1m segment in the 4 cities.
- $1-2m: This segment is performing well in Mississauga, but lags in the other three cities.
- Over $2m: This segment in all areas are classified as Buyer’s markets. We would describe them as difficult and price sensitive. In fact, there is substantial downward pressure on price in the $2m segments of all markets we serve.
- There was a significant surge in the Oakville luxury market over $4m in September, with 6 unit sales. This made it the best month we’ve experienced YTD in Oakville.
- There have only been 13 MLS sales over $4m YTD in 2019, almost 1/2 of them happening in September alone. We are hoping this momentum will carry into the final quarter of 2019.
What does this mean for Buyers and Sellers?
- If you’re a seller in this market, be aware of the challenges in your price segment. Patience is the name of the game.
- If you’re a buyer, particularly in the higher price segments, make your move as you have much more leverage in this climate.
When clients are planning a move, I am often asked the question about whether to buy first and then sell or sell first and then buy. This really comes down to personal preference and your risk tolerance. Understanding the market (the demand and the marketability of your home) and which segment you are selling in, and of course proper pricing, often dictate whether a person should buy first and then take the risk of selling. Scenario analysis is often best applied (ie. worst case vs best case), with honest real estate advice from a professional realtor.
The Federal election in October likely contributed to a slower than normal kick-off to the fall market, which is otherwise ticking along normally for this time of year.
As always, please contact me if you have any specific questions about real estate, your home and the markets in general. I can be reached at email@example.com or 905-484-2124.
Murray McKeage, MBA, CMA
The Goodale Miller Team