Let's Talk House Episode 18: Let's Talk House Episode 18: Why Are There So Many Homes For Sale In Toronto?

 Wondering what Toronto’s real estate roller coaster means for you? With new listings climbing and prices holding steady, now’s the time to get the facts. In today's episode, Lei will share what buyers need to know, how sellers can stand out, and why market absorption is the buzzword this season. 

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Transcript

Speaker 00: 0:00

Toronto's housing market is changing, and whether you're buying, selling, or just curious, understanding what's happening now can shape your next move. Let's get the scoop. Only here at Let's Talk House, your go-to source for all things real estate, mortgage, and beyond in the Greater Toronto Area in Canada. Welcome home. I'm your host, Lei Villar Cisneros. Today's housing market is changing, and whether you're buying, selling, or just curious, understanding what's happening now can shape your next move. With sales down, listings up, and interest rates shifting, this This podcast dives into the latest data and unpacks what it means for your bottom line. Learn how today's market can impact your plans from first-time homebuyers to seasoned investors. Today, we're diving into the latest numbers from May, unpacking what they mean for buyers and sellers, and talking about how interest rates and even global trade can shape our market here in Toronto. So grab a coffee or maybe a notepad and let's jump in. Starting with the market snapshot. Home sales are down 13% year over year. That translates to 7,013 sales. That's about 1,000 transactions lower from May of last year, giving buyers more time and leverage. New listings are up 14% from May last year. That's 18,612 MLS listings. You probably noticed this as you go around. More for sale signs are in the neighborhood, offering choices, but also increasing competition for sellers. What does that mean? You can sell a house on 2021 price tag. Those who bought in 2023 and 2024 that needs to sell right now are in for a big surprise. Home prices are down about $100,000 to $200,000 in some neighborhoods. Ouch! Some investors who bought properties using mortgage, like most of us, are now in a dilemma because the rental payment is not enough to cover the cost of maintaining the property. They are losing hundreds, if not thousands, every single month. And if you don't have the cash to maintain the property, then unfortunately, you have to let go. But what if the market value is less than the mortgage balance? It's like you have to pay me from your pocket just to sell the home. How about if you bought a pre-construction condo that is just closing this year? Well, it's a mess. The lenders might not give you the mortgage unless you dig deeper in your pockets to cover for the difference. It is a headache. Real big one. So sellers, you can't keep your prices the way it used to be. Have you heard agents turning down listings because of this? Oh yeah, I just declined three this week. Agents are not going to waste their marketing dollars if they know your house will just sit on the market. This result in having more and more homeowners raising their hands to sell their homes, offering choices and and increasing competition for sellers. Detached homes in Toronto 416 are averaging $1.43 million, while condos are steady at $683,000, numbers that matter whether you're buying, selling, or holding. In the 905, detached homes are at $1.32 million, that's down 5.6% year-over-year, and condos are surprisingly higher in price at $869,000. The bottom line? For sellers, expect more competition and buyers asking for incentives or repairs. Pricing strategy is key. Homes priced right still sell quickly, but Overpricing could lead to extended days on the market and lower offers. Staging and presentation matter more than ever. First impressions can make or break your sale. So this is also the time that you have to really ensure that the agent knows what he or she is doing because it can make or break your sale. For buyers, More listings means less pressure and the ability to negotiate. Lower interest rates are helping to ease the monthly payment crunch, giving you more buying power than you might think. But watch for surprises. If tariffs rise or inflation picks up, borrowing costs could climb again, impacting what you can afford down the road. This is why in real estate, you can't stay by the sidelines for long. You snooze, you lose. Remember during the pandemic, March and April were down, but as soon as we hit halfway through the year, prices skyrocketed. Now let's talk about the role of interest rates. Interest rates have recently softened, providing a much needed boost to affordability for many buyers. That's good news. The not so good news? If inflation or global trade tensions trigger new tariffs, or economic instability, rates could spike again. This window of opportunity might not last long, so if you're considering a move, it could be smart to act while conditions are still favorable. Now let's talk about market absorption. This doesn't get always enough attention. this is basically how fast homes are selling relative to how many are available it's calculated by dividing the number of sales by the number of active listings a high absorption rate means homes are flying off the market it's a seller's market a low absorption rate means homes are sitting longer giving buyers more leverage so real estate follows the rule of supply and demand if there's a lot of supply prices go down if there's a lot of demand and there's no supply prices go up right now with more listing and fewer sales our absorption rate is lower translation more choices for buyers and a bit more caution for sellers now let's talk about how this means for Sellers, this means you've got more competition and buyers are being pickier. Price your home right, invest in presentation, and consider those small repairs that could make a big difference. Remember, first impressions matter. And if you're a buyer, well, this is a welcome change. More listings mean less pressure and more negotiating power. And hey, with interest rate easing a bit, those monthly payments might be a little easier on the wallet. Just keep an eye on inflation and tariffs because if they spike, rates could climb again. At the end of the day, it's not just about numbers. It's about your dreams, your lifestyle, and the memories you're about to create. Understand these stats help you make confident decisions. Let's be honest, buying or selling a home is never just about numbers. It's about your next chapter, whether that's finding a place to grow your family, downsizing to simplify life, or making a smart investment for your future. I get it. It's emotional. it's overwhelming at times but that's exactly why i'm here to help you navigate the complexities weigh the pros and cons and move forward with confidence speaking of the pros more listings means better selection for buyers softer prices give both buyers and sellers room to negotiate lower rates boost affordability but they might not last the cons Uncertainty around global trade and inflation could change the game overnight. Sellers might need to invest more in presentation and be open to negotiation. Buyers still face challenges finding the perfect fit, especially in popular neighbourhoods. Final thoughts? In a market that's constantly evolving, staying informed and prepared is everything. Whether you're buying your first home, upsizing, downsizing, or just curious. I'd love to help you make sense of it all. Well, that's a wrap. If you're thinking of buying, selling, or just watching the market, let's share insights and experiences because knowledge is power and community is everything. Or reach out to me directly for a personalized strategy that fits your unique goals. Because your next move deserves more than just a stat sheet. you've been listening to let's talk house podcast your go-to source for all things real estate, mortgage and beyond in the Greater Toronto Area, in Canada be sure to press the follow button so you won't miss an episode also subscribe to Youtube channel follow me on instagram and facebook at @ leivillarrealestate. As always thanks for listening and we'll see you next time.