Making Sense of the numbers we read and hear

June 2019 Real Estate Numbers ( previous post). Please keep in mind that those reflect all units sold in the GTA, including condos, townhomes, semis and detached homes. 

Those stats do not look too bad.  “So the prices have not really adjusted downwards?” you may think.  Then why do we see so many unsold homes in some areas? 

First of all it is important to look at the smaller picture, the area your home is located in. How is the local market doing? Are the expectations of sellers too high? Are the buyers hoping prices go down further? 

I believe real estate is a sound longterm investment. If you did not buy at the top of the market ( beginning of 2017) you are still ahead of the game.  We can no longer hold on to  

the house price of Jan- May 2017. Those days are gone and it may take years to get back to that level. 

For buyers: it is great time to get into the market now. You can negotiate conditions in a contract that you could not in 2017. Yes, negotiate, one negotiates once again.  It is no longer unreasonable  bidding, adding more and more $ to your maximum price just to secure a home. 

For sellers: facts show reality.  If you want to move on, look at the equity in your home, do you own it outright? Will you get a higher price than what you payed for? Time has its value, if you want to move now and can afford it, do it. 

Don't just buy into the numbers you hear or what you read, but consult a professional who shows facts. 

Here is an interring scenario that may make you think. 

A bungalow in thenYonge St. / Cummer area was sold in March 2017 ( that was the top of the market) for $2,250,000.  50 % over asking price.  

The new owner put it back on the  market in November of the same year for $ $2,250,000 ( exactly for what it was purchased for) but could not sell it.  The home was on and off the market for almost 1,5 years, for 353 days.  The owner spend some money to renovate the home to make it more attractive, new kitchen, new washrooms, new flooring, new roof. The home was finally sold in March of 2019 for $1,410,000.  

Let's do a quick calculation:

Difference between purchase price and selling price.   $840,353. 

Land-transfer taxes.                                                             $85,450

Property taxes for 1.5 years                                                  $8,908.2 

                                                                              _______________

                                                                                            $934,711.20

Add to this number the renos and real estate commission and you have a loss of well over $1,000,000. 

I am all for being optimistic, but as a realtor I also have to bring the reality to my clients.  In certain areas the prices of detached homes have adjusted downwards by a lot. We can't run away from the reality.  Let's chat. Let's determine  the real value of your home. With that information you can make decisions and plan regarding selling versus staying.