Let's Not Panic About Today's Condo Market

31 October 2012

Many of you are concerned about the slowdown in our market – particularly condos. Those who have been in the business for a considerable period of time would describe this as a pause! For those who have been with us for over a decade, you can recall a number of pauses – this market has not been going up unstopped for the last twelve years. At the start of the twenty first century, there was the Tech Bubble which impacted technology companies and stock brokers, two of the most influential industries for us downtown. Then there was 9/11 and everyone just stopped and watched. People were advised not to buy high rise condos because you could be susceptible to future attacks. Next there was the SARS disease and people would not even come into Toronto, let alone go out and look at condos. Then we had the Financial Crisis of 2008/2009. All of these were over in three to six months. What do we have today? A media and a Federal Government who believe it is better to rent than to buy. Look at the end result – multiple offers on rentals. What does that tell you? More and more people want to live in downtown Toronto. That is not going to change. There are also no under lying economic reasons for the market to slow down. We just have to let this play out. The good thing is that young people can only postpone buying decisions for a certain period of time and then they start all over again. For the latest clothes and tech toys, it lasts a few months. From past experience, my guess is that the preference to rent will pass in about six months. Young people always want it now not later. So what do we do? First Realtors should focus on only those people who need to sell or need to buy RIGHT NOW! Move the ‘tire kickers’ into a ‘contact in the spring’ file. Deal only with people who have to move for non-economic reasons – a change in family size and they cannot wait six months. The only Buyers to focus on are what we call ‘early adapters’. They see the market ahead of the pack. There are plenty of good buys now and prices will decline by at most 5%. 'In demand' properties will not decline at all. For these people, they can focus on what they want without the worry of multiple offers. This is also a great time for people who want to move up. The price gap between what they own and what they want to move to is always narrower at times like this. The point to be made is that right now is just the second opportunity for Buyers in the last ten years and it will only last for about six months. So lets call it like it is: A BUYERS MARKET FOR THE NEXT SIX MONTHS