Real Estate News

Watch Toronto Real Estate Heat Up And Cool Down Over The Past Year

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Better Dwelling

I’m preparing some notes for next week’s CMHC panel on the future of home prices and thought I would give readers a peek at some of the indicators we use. This is a simple, but a powerful indicator that just happens to look pretty cool on a map – buyer confidence in prices.

When buyers are confident in a market, they’ll pay a premium to enter. The thrill of the buy often leads to a rapid build of overconfidence, and that’s what happened in Toronto this year. To illustrate this, we graphed the number of people who paid over asking price.

The video above shows buyer distribution, and visually graphs the increasing normalization of overpaying, and then the cooling of the market. Each blue dot represents a sale where transfer records show they paid less than the buyer was asking, a.k.a. it sold under ask. Each red dot represents a sale where the buyer asked for less than transfer records indicate they paid, a.k.a. it was sold over asking. Homes that were deliberately priced under ask for marketing (i.e. the seller priced way below market), were removed. Note, the dots show the vicinity of the sale, not the exact location, to protect privacy.

Continue to read on.Better Dewlling

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