Apr 28 | Posted by Barry

The ebb and flow of the Toronto real estate market is fascinating.

Every transaction is its own “market” - a seller lists at a certain price and potential buyers can offer more, less, or the asking price. Once an offer has been made the negotiations begins. Each party may have certain opposing, or similar criteria, other than price, that they want met (ie. closing date) and will be willing to negotiate for them.

The secret in negotiating may lie in learning what criteria are important to the other party, as surprisingly price is not always the most important term.

What we have seen of late in Toronto is a seller’s market. There was a very limited supply of homes on the market and there was pent up demand on the buyers’ side. This resulted in multiple offers and many homes selling for more than the asking price. At times like this buyers can fall prey to their emotions - “if we don’t buy something now we won’t get anything, or have to pay more down the road…” This causes other potential sellers to put their homes onto the market to see if they can take advantage of a similar situation.

Ultimately, more homes on the market means more choice for buyers. More choice means buyers will not have to go after the same properties. Buyers will no longer feel they have to move quickly, they can take their time. The buying cycle slows a bit and the market starts to turn into a buyer’s market, changing from a seller's market. This transition is most certainly cyclical. Notwithstanding that values rise on the whole, there will be noticeable price fluctuations between market transitions.

And so the ebb and flow of the Toronto real estate market goes.

If you are thinking of buying or selling, your real estate agent should be able to inform you of the type of market which exists, to better help you in making wise and informed decisions. If they don’t make sense, you know who to call.