Waiting For The Fall Market

As we near the end of a typically slow summer, all eyes are turning toward what we hope will be a strong fall market. Bookended by Canada Day at the beginning and Labour Day at the end, the summer market is invariably a quiet time, for several reasons:

• Warm summer days are with us for only a short time, so many of us take vacations from both work and real estate during that time.
• Our kids are out of school, cementing summer as vacation time for families.
• “Everyone knows” that summer isn’t a great time to buy or sell – it’s a self-reinforcing pattern.
• Real estate agents tend to support the ‘summer is slow’ meme; they like to take vacations, too.

The fall market can often be as strong as the spring, although shorter. It starts a week or so after Labour Day and ends when the weather turns cold and thoughts turn to Christmas parties, generally around mid-November.

Houses

Toronto house prices have fallen steadily for the past three months in a row, and now stand about 10% below both this spring and last August. Tariff/trade uncertainty, together with recession fears, have certainly taken a toll this year. There is reason to hope that the normal seasonal trend, together with at least 50/50 odds that the Bank of Canada will lower the bank rate at their September 17 meeting, will lift prices up over the next couple of months.

Prices have been flat or falling for the past 6 months, so there has been little urgency for buyers to purchase ‘now’. Even so, we’ve seen evidence of pent up demand, as energetic bidding wars persist for properties that ‘check all the boxes’. When buyers see prices start to increase, they may return to the market in force, creating a virtuous upward spiral.

Condo Apartments

The condo market has also experienced a slow summer. Plus, condos remain deeply mired in buyers’ market territory, with almost  months’ inventory of unsold units. Condo prices might rebound to some extent in the fall, but with so many units to choose from, it’s not likely that condo buyers will push prices significantly higher.

Bottom Line

After a slow summer market in Toronto, there is guarded optimism that we could see a seasonally driven rebound over the next couple of months, more so for houses than for condos. We will get an idea as to how strong this rebound might be over the next 2-3 weeks.