How Do You Know When the Market has Peaked?

30 March 2016
Remax-Condos-Plus

How do you know when the market has peaked?

That is the magic question that everyone wants the answer to.

A great deal of experts or bears (a person who believes the market will drop) put too much emphasis on historical statistics like Property Price-to-Rent and Price-to-Average Income Ratios.  This may shed some insight on the market but will never accurately predict a peak.

The reality is that no one ever knows the peak of the market until after we have passed that peak.  It’s only then that everyone has great rear view vision. The smart people realize the downturn first and they react first.

In order for the Toronto Real Estate Market to take a turn , there has be a fundamental shift in the driving forces of demand (buyers) and supply (sellers) for anything to happen. Currently, even with Toronto’s construction boom, we have barely kept up to the demand of buyers who want to live and work downtown.

We need to keep in mind that experts who track published statistics are always three to six months behind the market. So how can they make a call? If you want to be first to realize the downturn, then you need street presence, that’s feet on the ground. A good Realtor is probably the best person to ask when it comes to knowing where the market is every day. Working in the field gives them a better sense of what buyers and sellers are doing before the statistics even get published.