LACKIE: Good homes still sell in a turbulent real estate market

Well-maintained homes with parking on good streets in great neighborhoods with excellent schools are always in demand.

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It is indisputable that the real estate market is having a moment.

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While some say it’s a crash of apocalyptic proportions, others insist that what we’re witnessing is nothing more than a necessary tempering after a truly mind-blowing ride. None of this is good, of course, but on the one hand it’s like the ship is sinking while on the other we have something closer to fuel starvation with no wind in the type scenario sails.

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One is a pause while the other is a dip.

The past two and a half years have been both amazing and horrifying to watch. And while the course our market has taken since the mid-2000s has certainly had awkward moments here and there on its upward trajectory, if you squint, it’s been almost a straight line of rapid appreciation.

What one might conclude is largely a choose-your-own adventure at this point.

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The bears insist that we’ve been waiting for an epic judgment for a long time. That years and years of loose fiscal policy combined with loose monetary policy, especially during the pandemic, has created a powder keg that is about to explode in all of our faces.

Bulls – and please note that I make a very clear cut distinction between those with bullish faith in the long-term value of real estate and real estate boosters who will never be happy to sell you something – subscribe rather the certainty that, like any investment asset, there will be downtime, but the idea is to hold on for the long haul and win.

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And as someone whose life literally revolves around real estate, it can be hard to know what to make of it.

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But here’s what I know from actively working in this market.

Things still sell. Well, good things sell. And good priced products sell out fast.

He is.

Well-maintained homes with parking on good streets in great neighborhoods with excellent schools are always in demand. We know this because they always sell in multiple offers. The elevator may be smaller than it was last winter, but buyers are ready to compete.

A conservatively priced semi-trailer in Seaton Village sold out last week with fifteen bids and topped the list by 13%.

Another semi in the city center sold in multiples for 97% of the listing two days after hitting the market.

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Prices have gone down, absolutely, and there are definitely some good things on the market that aren’t getting any love, but if the market has crashed, I just don’t see it. Even though my own professional perspective is extremely cautious, I still had a busy fall working with clients for whom life goes on.

Every agent I know that works in downtown Toronto has buyers behind the scenes, waiting for inventory to improve. This is especially the case for buyers who are sitting on substantial equity in their home and who have mortgages that they can usually transfer. By their calculations, the opportunity offered by price moderation outweighs the increase in borrowing costs, which most believe will start to come down in a few years. Most are just waiting for some stability to get back into the market.

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But the pain in the market is real, especially for overleveraged people with adjustable rate mortgages who are now struggling to keep up with their payments. With no sign of a reprieve coming, there must be a lot of people who are feeling increasingly hopeless. Market statistics clearly show inventory levels incompatible with widespread unloading. Inventory remains tight. While some people definitely need to sell, it’s not yet noticeable in the data.

What comes next is anyone’s guess. The key word being guess.

One thing I am absolutely certain of: families will continue to form, expand, dissolve and repeat themselves. Life goes on regardless of the economic forecast.

@brynnlackie

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