Fall 2022 can be summarized in one word,  cool.  The weather is cool, the chunky sweaters that are in fashion look cool and this year, the real estate market is also cool. Now to be clear, cool and “crashing/ imploding” are two very different things. In-fact, think of “cool” and “relaxed” as interchangeable. Big picture, this cooler market is being driven by higher borrowing costs, meaning buyers aren’t as able/willing to bid-up prices. As a result, profit-seeking sellers (those that have no need to sell outside of the fact that they can make a large chunk of money) and move-up sellers are holding off. In addition, there is uncertainty about gauging “the bottom” leading buyers to hold off. This has lead to the lowest amount new listings and transactions in the past 20 years.

 

 Lots of promises & pouty nimby’s? 

The Conservative government recently put forward a monumental Bill: Strong Mayors, Building Homes Act. This bill bolsters mayoral powers in order to “advance provincial priorities… and the construction and maintenance of infrastructure to  help build housing faster ”. In short, this bill would help to “fast-track construction of duplexes, triplexes, laneway suites and other projects stalled by exclusionary zoning .

Getting technical for a moment, the mechanism that would allow for this is literally a stronger mayor, who would be granted veto power for any bylaw passed by counsellors that interfered with the provinces’ housing initiatives. These may include items like transit, roads, utilities and of course,  exclusionary zoning

With the Toronto’s municipal election coming up on the 24th of October, we expect housing, especially affordable housing, missing middle development and zoning to be a major part of the conversation for all parties. The “right answer” is still not clear, however it is apparent that discussions on process and expectations for missing middle development, in particular as-of-right zoning for existing single family residential properties will likely be a cornerstone of the solution. We expect strong support from Tory’s re-election campaign, while candidates Chloe-Marie Brown, Sarah Climenhaga, Phillip D’Cruze, Isabella Gamk and Ferin Malek have all expressed some form of support for the bill. Not everyone is supportive, with Blake Acton, Kris Langenfeld, Gil Penalosa and Knia Singh all expressing concerns and or oppositions to varying degrees.

How each candidate will approach the Strong Mayors, Building Homes Act., exclusionary zoning, missing middle and other housing policies is still uncertain, we are however very certain these will be the hot topics this Fall. 

 No more snoozing on offer nights 

It’s a touchy subject because sellers love them and buyers generally want nothing to do with them, but “offer nights” are still the most popular strategy during a seller market. Over the past few months we’ve seen very few offer nights as a result of buyers pulling back, transactions slowing to a bare minimum and the common knowledge that selling during the summer is slow even at the best of times. However, since listing a property does involve some extrapolation and speculation, as we moved into “Fall Market” and supply continues to be very low, those properties that are listed are getting moderate activity, and we have started to see the comeback of offer nights. We don’t expect to see a complete resurgence of the practice this fall, however, we do expect them to be a more regular occurrence as the season progresses.

 Exactly what we’ve all been asking for? 

Lastly, we are going to share a potentially controversial opinion. For years buyers have been dreaming of lower prices, conditional offers, not having to complete in offer nights and being able to take their time finding their next home… Well, good news, that’s exactly what the market is like right now. Now of course, there are risk downsides, those being a) It’s difficult to gauge the bottom and most people always assume right now is not it. b) mortgage rates are rising. No one has a crystal ball, but the best funded economics departments across all the big banks are predicting a 20% ish total decrease in home values, across Canada, with major cities like Toronto unlikely to feel that same pinch. We continue to be strong proponents of “you make your money when you buy” meaning we always recommend being as diligent as possible when agreeing to a sale price, now we just have a clear “target” to work with.

So, what do you do with that information? Well, if you are comfortable with a current rates, want a guarantee that you aren’t buying at peak prices and want a more easy-going, risk-averse home search, then you are getting everything you have been asking for!

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