A topic that influences all of us in the real estate market, whether we're sellers, buyers, or investors. We're talking about market trends and their significant impact on our real estate endeavours. So, without further ado, let's jump right in.

Your position as a buyer, determining how much to pay for a property, or as a seller, deciding the potential selling price and time frame for a property sale, depends largely on the prevailing market trend. There are three main types of market trends:

 Buyers Market - These are the markets where Real Estate Inventory is in abundant supply, the buyers community can choose from wide variety of choices and when something fits the aspirations, its price can be negotiated and deal made. There is generally nil to minimal competition in the Buyer's driven market. Real estate is all about demand and supply, just like any other market. The more the inventory is in the system, the lesser the demand is and the prices will be appealing for the buyers giving a lot of options to choose from. In such markets the properties tend to sit longer on the market before exchanging hands. 

 Balanced Market - Here's where buyers and sellers meet on equal ground. The supply and demand are relatively balanced. This ensures that parties on either side of the transaction are in level playing field, the property in a balanced market will sell on its merit and will not stay for long on the market. For a credible and well presented property the sale would be relatively smooth and fast, for an averagely presented or deficient property, it will stay longer in the market even in the balanced market. 

 Sellers Market - This is when the tables turn, and the sellers hold the aces. With a short supply of inventory and a high demand from buyers. These are the markets where the supply is too short and due to the absence of healthy inventory level, there is a lot of competition between the buyers. This results in multiple or competing offer situations for the Sellers, they can choose from the offer they like best in terms of price, deposit and conditions. The Seller as an entity is driver in such markets, the properties, even the averagely presented ones would sell briskly in such market. In this Seller's market the only properties which sit on the market are the ones which are highly deficient in their curb appeal or interior elements. 

To illustrate these trends, let's take a look at the fluctuation of average home prices in the Greater Toronto Area from February 2022 to July 2023. We are right now in August of 2023, and here you can see the mapping of average prices from Feb 2022 to July 2023. As you are able to see here the market from March 2022 until July 2022, is a buyer's driven market, and the reason you see here the prices were negotiated and there were huge month on month drops in the prices. The interest rates were increased 9 times between March 2nd 2022 and January 25th 2023. During these successive increases the market as you can see here came dramatically down in first five months and then adjusted itself by July 2022. 


From July 2022 onwards to January 2023 the market behaved as a balanced market, the inventory was getting released gradually, the buyers were also limited and it was a very balanced market all these six months here from July 2022 - January 2023. 

From Feb 2023 onwards the market again tilted and trended to became a Sellers market, the small inventory was quickly consumed by the buyer community in these months and that resulted in increased competition amongst the buyers. 

Recognizing these trends is pivotal in shaping our approach as real estate professionals. For instance, in a declining market, it's often better to sell before buying. Conversely, in a rising market, it may be wise to secure a purchase before selling. This understanding is key to maneuvering the market effectively and achieving your real estate goals.

This would become reverse in the inclining market which you see here from February onwards, for buy/sale scenario the purchase can be inked first to lock the best price, followed by the sale to ensure the best price our Sale can bear in the market. 
In a balanced market it the timing of sell and buy can be either way, however, I would recommend to ink the Sale first and then move forward to the purchase. This will provide you the peace of mind in executing both sides of the move, and you can move-up or move-down in a stress free way.

Wish you all the very best! Reach out to our dedicated team at Elixir for any queries you have in Real Estate and we will do our best to help.

Mudit Mehta 
Broker of Record
ELIXIR REAL ESTATE INC.
Off: 416-816-6001 | [email protected]

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