The fall bump
September home prices were up sharply, as the chart above shows. At the same time, the historic pattern (dotted line) leads us to expect this type of price increase… the fall is firmly established as the “second season” in Toronto real estate.
Dig a little deeper, and more patterns emerge. Take bidding wars, for example. They are now an established part of the home-selling scene in most parts of the GTA. Two key variables are how frequently homes sell in a bidding war; and how much the final price goes over asking. We sampled some MLS local results from the last two weeks…
Bidding wars are local, too
In a group of central Toronto neighbourhoods, over 50% of recent house sales went over asking and were undoubtedly the result of multiple offers. Furthermore, about half of those bidding-war sales produced a final price more than 10% over the asking price.
In a group of North York neighbourhoods, the proportion of sales over asking was similar – around 50% of the houses that sold went in a bidding war. About half of the group that went over asking ended up with a result at least 6% over the list price. Overall, the North York bidding wars produced a lower level of percentage increase.
In a group of homes recently sold in Vaughan, only about 20% of the houses went over asking. In this sample, only one-third of the bidding-war sales went for more than 5% over the list price.
Competition and demand
These figures reinforce what most of us already know: Demand for homes is strongest in the central core of the GTA, and competition for houses in older neighbourhoods creates a situation where multiple offers are more common. As you go out from the centre, it gets less intense.
There’s also another message here… As prices keep increasing in the hottest areas, buyers shift to “the next best thing.” We’re seeing a fundamental revaluation of Toronto housing, and it’s affecting houses and condos, both in the 416 and in the 905.
If you’re thinking of selling, it’s good to bring your agent into the process early on… You can email us, or call James and Joanne at 416-483-8000. Yes, we’ve listed homes in all the areas we sampled above – and obtained sales over asking for our sellers in all of them! We’ll help you with your plans and create a strategic marketing plan that works for you.