On 26 April, I listed and sold a property. The Seller was asking approximately $50K over $1M; $1,048,000 to be exact. Yes I was able to sell it in 14 days for 97% of the listing price but two months of preparation went into the property, including getting small renovations done, decluttering and staging.
The point I am trying to make is that while on paper, it may seem that the market is relatively healthy, but for houses in the $1,000,000 to $1,249,999 price range, the sales had dropped 54.31% year over year in the month of March 2018 and 45.43% year over year drop in April 2018.
Sales of luxury houses saw a year over year decline of 68%, but only 18% when compared to 2016 in the first quarter. Main reasons are the new mortgage stress test and higher mortgage rates. So many buyers were lining up to buy this home but wanted to pay less than one million dollars. Even $999,999 would do; mainly because of the mortgage rules for houses above $1 million. The Ontario (un)Fair Housing Plan is also to blame for the stagnation in the market, while the plan did little for the first time home buyers.
If you have fewer entry-level buyers, you have fewer move-up. If you have fewer move-up, you have fewer entry-level luxury and, if you have less entry-level luxury, you have fewer people buying luxury homes. It is a cycle and in order to get out of it, you need a honed real estate professional.
The good news is that if the right kind of work is put into a property, the results can speak for themselves, just as in the example above. 14 days on the market and sold for 97% of the asking price.
Though effort has been made to ensure the accuracy of the contents, the reader is advised to verify the information independently. This post may contain contain information that is privileged, confidential and exempt from disclosure under applicable law. The reader is not allowed to reproduce it in any medium without the author’s prior written permission. Jagdeep Singh is a broker with Century 21 Heritage Group Ltd., brokerage (416) 798-7133 which is independently owned and operated. This message is not intended to solicit parties currently under contract.