2019 Year in Review and What to Expect in 2020
On behalf of our entire team, I would like to extend our best wishes for an amazing 2020 ahead. The start of a New Year is always filled with such incredible optimism and reflection of the year just past.
YEAR IN REVIEW
2019 was a fascinating year in most of our real estate trading areas. The downward pressure on prices continued through the early part of the year in most neighbourhoods. Much of York Region and South Simcoe saw further price erosion through the spring and into the summer. Inventory remained lower than normal – which typically creates a Seller’s Market and an increase in prices. However, the Mortgage Stress Test remained a significant deterrent to a purchaser’s ability to buy a home or move up to a larger home, and as a result the low inventory was also coupled with fewer qualified buyers in the market. This created a Balanced to Buyer’s market in most of our trading areas during the first part of 2019.
The Fall Market however provided some much-needed positive news. Inventory continued to remain lower AND the buyers seemed to come back. Townhome and Semi-Detached markets showed reasonable strength early in 2019 and prices rose gradually through the year. As those prices rose, the move-up buyers also began to recognize the purchase opportunities in the detached markets. As a result, the domino effect occurred, and we saw an increase in the sale of the larger detached homes by October. This trend continued through the remainder of 2019.
The good news is that almost all categories of housing have shown year over year price increases and the market overall is showing signs of stability and renewed buyer confidence.
5-YEAR HOUSING PRICE TRENDS
2020 LOOKS TO BE A YEAR OF EVEN BETTER NEWS FOR HOUSING
With the New Year upon us, I will be closely watching inventory levels and early year price activity. Every expectation is that prices will start to rise quickly in 2020. Lower than normal inventory coupled with the reality that prices are clearly moving back up MAY cause significant buyer motivation to get into the market or into a larger home. As a result, we may see some bidding war activity again in certain price categories. (Townhome and semi inventory experienced multiple offers throughout 2019.) As well, we may see a return to the type of price surge that historically occurred in the first quarter of each year. I would not be surprised to see a 4 % price increase across most housing categories by April and heading into the summer. (Some economists are suggesting we may see prices rise by as much as 6% across the GTA.)
Whether prices continue to rise beyond that will depend, in my opinion, on government announcements at or leading up to their respective Budget Speeches late Winter/Early Fall. Both the Federal and Provincial governments are keenly focused on the housing sector and its impact on the economy. Federally, I anticipate an easing off of the Mortgage Stress Test and/or a return to 35 year amortization for mortgages. Provincially, the Ontario government has made it clear that the housing market is one that requires additional consumer protection and incentives to re-stimulate the recovery from the recent downturn that has plaguqed some of the markets outside of Toronto.
As always, what is happening in the market in general must be interpreted based on your specific area and in harmony with the goals you are looking to achieve. Helping families achieve their goals is our highest priority and the singular purpose for our business. Give us a call, text, or email and let’s put a plan together for you this year.
If you plan to BUY this year:
- Call us or CLICK HERE and let’s meet! The buying process can be tricky. We’d love to guide you through it. We can help you find a home that fits your needs and budget, all at no cost to you. Give us a call to schedule an appointment today!
- Get pre-approved for a mortgage. If you plan to finance part of your home purchase, getting pre-approved for a mortgage will give you a jump-start on the paperwork and provide an advantage over other buyers in a competitive market. The added bonus: you will find out how much you can afford to borrow and budget accordingly.
- Create your wish list. How many bedrooms and bathrooms do you need? How far are you willing to commute to work? What’s most important to you in a home? We can set up a customized search that meets your criteria to help you find the perfect home for you.
- Call us or CLICK HERE for a FREE Comparative Market Analysis. A CMA not only gives you the current market value of your home, it will also show how your home compares to others in the area. This will help us determine which repairs and upgrades may be required to get top dollar for your property, and it will help us price your home correctly once you’re ready to list.
- Prep your home for the market. Most buyers want a home they can move into right away, without having to make extensive repairs and upgrades. We can help you determine which ones are worth the time and expense to deliver maximum results.
- Start decluttering. Help your buyers see themselves in your home by packing up personal items and things you don’t use regularly and storing them in an attic or storage locker. This will make your home appear larger, make it easier to stage … and get you one step closer to moving when the time comes.
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