As if there was any surprise, 2014 is shaping up to be another record breaking year for real estate sales in the GTA. Naturally, this is good news for those selling and downsizing, and bad news for those trying so desperately to break into the home ownership arena. Over the short term, tight supply and low interest rates will continue to play a pivotal role in price appreciation. For now however, the best entertainment continues to be the Sale Price Guessing Game as multiple offers continue to dominate the real estate landscape.
Available listings in the Freehold market declined by over 30% this week while sales only declined marginally. One would think that this unfortunate combination would create a spike in multiple offers but for the first time in months, it seems that cooler heads have prevailed. Our speculation is that there is a fair amount of Buyer fatigue going on from those who have lost in multiple offer scenarios. The resulting condition causes buyers to draw a line in the sand when it comes to the price they are willing to pay. Multiple offers declined this week by a remarkable 15%, meaning that ONLY 50% of homes had more than one potential buyer.
The Condominium Market continues its balancing act. Both sales and available listings backed off by nearly 10% this week while the percentage of multiple offers remained relatively unchanged. Our research indicates that there are two interesting forces at play in the condo sector. First, lack of affordable freehold homes will continue to drive buyers to larger condo suites. Second, and as long as fewer suites in that size category continue to decline, we expect prices to outpace smaller suites.