It is a very interesting time in our business, but not surprisingly, I will be the first to say that the sky is absolutely NOT falling. Certainly we saw a runaway market in the spring of 2017. It was an emotion driven buying frenzy where we saw a shortage of supply and a surplus of buyers. The result was what we all witnessed as an “extreme seller’s market”. While supply and demand were driving the base market, cheap mortgage money and the fear of missing out caused the “market froth” we seem to have lost now. The question on everyone’s mind is “how far is it dropping and when will it recover?” Every economist, realtor, investor, hairdresser and my uncle Louis seem to offer the answer to this question, and most I talk to have some great insights from differing perspectives. It’s only fair that I add mine to the mix of qualified and unqualified guesswork floating around out there. I should preface this by saying that my opinion has very recently changed and might change again by the end of the day. My initial outlook was towards a very strong Fall market with an significant increase in prices noticeable by the end of September. My reasoning was that as the market froth was primarily driven by emotion, or a herd mentality, so was the change in market. I reasoned that the summer market would be slower than typical and by the time September rolled around we would have had our fill of the media writing about the downturn in every sensational manner possible. September always has an increase over August simply by having more buyers in the market, summer holidays are done and people get back to looking after real life issues, like housing. It would be at this point in September some bright reporter would write a story about the market beginning to show signs of recovery. On news of recovery, I anticipated the herd mentality kicking in once again and the buyers rushing straight back into bidding wars and driving prices back to the stratosphere where they belong.It’s been many years since we have seen a market with declining prices in Toronto. The vast majority of our 50,000 real estate brokers and agents have never experienced a market in decline, and it’s not hard to tell.
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