Chantal Vaillancourt REALTOR®

Chantal Vaillancourt REALTOR®

News: Incite Is the Toronto Summer Real Estate Market returning to Normal

Patrick Rocca- Is the Toronto Summer Real Estate Market returning to Normal?

Incited.ca · Patrick Rocca- Is the Toronto Summer Real Estate Market returning to Normal?

Jeffrey  :

I’m here again with Patrick Rocca, who is with Bosley Real Estate in Toronto. Although at the moment he’s taking some well-deserved RNR outside the city. Patrick, can you introduce yourself and tell our audience exactly what you do.

Patrick  :

Sure. Good morning. Jeff

Patrick Rocca with Bosley real estate. I work in the the Davisville Leaside market, predominantly Midtown area of Toronto. And yes, I am taking some R ‘n R. Well-Deserved and it’s been a crazy roller coaster over the last few months and just a little burnt out.

Jeffrey  :

I completely understand. There’s been a lot of ups and downs in the market in Toronto over the past 18 months or so, and I, I just saw a headline in the global mail talking about, perhaps we’ve just passed the peak of this bizarro market. Have you seen any signs of that in your real estate transactions?

Patrick  :

A hundred percent. Actually we started noticing it in May. If you look at the last two months statistics we started coming off a bit in May. I think it’s sort of a natural progression because we have, like you said, had such a crazy run. It’s been very, very busy price increases that are above the norm extremely above the norm. And I think now with the vaccine rollout and more people getting vaccinated and things starting to open up, people actually want to travel and they want to go away. So I think housing is maybe going to get pushed to the, to the back burner for the summer, at least. I mean, I anticipated before the may long weekend that I said to myself, if we have a slow weekend we’re back to a traditional market, which means, you know, long weekends people go away. Summer, July, August people go away. And I, and I know that’s going to be happening. I know people that have property in Niagara on the lake and prince Edward county the Airbnb and they’re, they’re booked all summer. So there’s been a noticeable slowdown. But like I said, I think we’re transitioning back to a traditional market, which is busy spring, slower summer. And I assume and trust it will pick up again in the fall.

Jeffrey  :

I do want to put your comments in context, when we say we see a report that says the market is slowing down, it’s slowing down from the Torrid crazy pace that it was back to something which is more normal, more seasonal year over year, which we saw oh, before the pandemic, for sure. But I was recently down in the Niagara area and I was having lunch with someone and there have been so many changes. He said over the year in terms of new housing starts new developments and people he’s been talking to have come in mostly from the GTA area, because they’re thinking now the new reality is they only have to commute into the city, you know, maybe two days a week. So if they need to do that, you know, commute on the highway for an hour and a half or two hours only twice a week, it makes it worthwhile to make that move down to you know, outside of the city. I would only talk about that before, you know, initially in the pandemic, there was a kind of a rush to get out of the city. Then we saw some folks moving back. Are you seeing any differences in the flows in and out of the city?

Patrick  :

It’s interesting that you ask that because I got an email yesterday from another publication asking me to do an interview. And if I was noticing any people that had moved out that are moving back in on, I have not noticed that what I have noticed is that there is still people moving out, maybe not at the pace they were last year. But I think it’s much too early to, to speculate whether people are going to say, okay, maybe I’m going to move back into the city because, you know, bosses want me actually in my office as opposed to online. So I think it’s a bit too early for that. I think maybe you’ll see those signs in 2022, but right now we’re still seeing people leave the city.

Jeffrey  :

And that’s my sense, as well as that, you know, especially in areas that we’re already seeing some, some overflow, some migrant net, inward migration, like Hamilton, it’s moving out to other places. And I think that people are now realizing that one of the outcomes of the pandemics is more flexibility in their work situation. And in a lot of cases, I know that friends, I have that work in insurance or banking, you know, their employers are saying that they don’t have to be in the officer or make an appearance in the office till September at the earliest. And that they are more flexible about who gets to work from where rather than, you know, the norm being in the office. And so over the long-term, do you think that that might affect housing prices in the GTA?

Patrick  :

I’m not sure. I can say though that I have been talking to people as well, and you are right. There are companies and corporations that are more flexible with their employees and allowing them to work remotely. But I’m also hearing that you know, like you said, September I’m, I’m hearing the same sort of thing. Maybe fall maybe early 2022, that, that companies and corporations are gonna want their employers back in the office or employees back in the office. I’m hearing that from, from, from the people. So if that happens, some of those people that moved to the Gulf, for example, maybe they’ll regret that move. And in that, in that commute if they have to go back into the office, full-time now that’s again, just hearing that from, from a few different people, but I think a lot of companies want to get back to him and norm whatever that is as soon as they can.

Jeffrey  :

And, and often it’s the, the workers who are able to work remotely, you know, that work in knowledge working type of scenarios that are able to be more flexible because if you work in, in a production facility, like a hands-on production facility, and perhaps you haven’t been in the facility now that things are ramping back up, you know, there are certain employment categories that, you know, you can’t really work remotely. So it D I guess it very much depends on the sector you’re in. And you know, the capabilities you have of that specific job function.

Patrick  :

A hundred percent. Yeah, I agree with that. And I also think employers, like I said, they want to try and get some sort of normalcy back in socialization. I mean, I mean, there’s, there’s more than just work and sitting behind a computer. There’s also the socialization in, in, in an office setting that, that works for a lot of employers.

Jeffrey  :

Yeah. And that’s exactly what I’ve been hearing too, is I do a fair amount of conversation with folks in the U S and they are definitely three months ahead of us. You know, they’re already, you know, back to pre-pandemic levels in terms of plane travel you know, airports, a busy offices are, are back up to 80% in terms of 80% occupancy. I just saw a recent stat. And so I think that they’re further along, we can maybe take a few looks at what they’re doing. You know, obviously their economic situation is quite a bit different than what we see in Canada, but, you know the thing you were talking about, people want to travel. There’s a lot of pent up demand for people going out to restaurants, people, you know, seeing friends having drinks, all that stuff that pent up demand I see is something which throughout the summer, you’re right. It might be taking a little bit of the heat off of the real estate market as people, you know, you know, get back to some of these normal activities.

Patrick  :

Yeah. And I think there’s, there’s, there’s good opportunities all around to it. And when it comes to that, I mean, like I said, it will be slower than the summer. There’s no doubt. I mean, I, I, I would be surprised otherwise, but I mean, that bodes well for buyers because this market has been strictly skewed to sellers and buyers have been having a real rough goal. Well, now if you’re listing your property and you have to sell in July or August you know, you may not, you may not do as well as you would have in, in April or may for sure. That’s just the reality. And I’m, I’m telling people right now, if they don’t have to shell, they should probably wait until fall. Because I think, I think that that’s when things will come back, like I said to a more traditional markets it’ll pick back up will be, hopefully there’ll be more inventory. We also have a lack of inventory and hopefully that’ll change in the fall market.

Jeffrey  :

Yeah. And, and that’s some of the similar advice that we’ve talked about in the past, and, you know, it’s rare that we S we say there may be an opportunity for buyers in the summer, and most of the time, there’s just so limited supply. There’s no product in desirable areas that buyers are just having to play by the sellers rules. So it’s good to hear, and maybe some balances coming back into the market, but I think it’s all relative. I was talking to somebody who was in the market for their first home. And they’re saying, how do people buy in this market? And what is driving this market? Like, is it international buyers? Is it, you know, people that are, you know being helped by, you know, family members, you know, is it any one thing which is predominantly moving the market?

Patrick  :

I wouldn’t say it’s just one thing. I mean, international, definitely off the table. I mean, there’s, there’s not much international buyers right now, although that could change with the opening of the borders. But I, I see, you know, several things you’ve mentioned. I mean, you know, people helping their children people moving from a condo to a house because they realized during the pandemic that they got to get the hell out of a condo and they want to have outdoor space. And you know, the reality is, is that there has not been a lot of supplies. So, and there there’s a lot of demand out there. Shockingly, it’s been, it’s been crazy since, since May of last year.

Jeffrey  :

Yeah. And that’s something that, that I definitely could have, could not have predicted because, you know, when the pandemic first hit, the first thought everyone had was like, my God, we’ve just got a hunker down. We can’t go out. And then, you know, like you said, as, as precautions came in, you know viewing schedule viewings were becoming the norm that people are actually coming out and actually you know, viewing these properties. And I think that, you know, on the seller side, a bit of reluctance to have folks in. And so the, the supply, which has already constrained trunk even more, which obviously drove up the prices and now, you know, like looking ahead to the fall, maybe we will see a bit more balanced, more supply coming onto the market as people aren’t as concerned about, you know, strangers coming through their homes

Patrick  :

I think, I think that’s quite possible. And yet we have, we’ve had to deal with that during COVID with precautions and people being nervous about, you know, not only having people in their home, but going to the home to buy, I mean, I have several binds that have been very cautious and about that. So, I mean, you know, like I said, opening up now, vaccinating, I think we’ll be, we’ll be changing. Hopefully sooner and later in, like you said, the fall probably be some you know, some more and the market will pick back up.

Jeffrey  :

And one of the things that, that we’ve been loath to do is kind of predict the interest rate policy, which you know, definitely influences the market, especially when you’re looking at properties that are in the seven figures and with all of the pent up demand and folks, you know, going back out and doing restaurants, traveling that sort of thing. There has been a sense that inflation is going to go up, which isn’t directly tied to the interest rate. But as one of the drivers, you know, if in fact that is something that people are worried about, how would you advise a buyer to protect themselves in case of rising rates?

Patrick  :

Well, I mean, you know, rates are so cheap right now. I mean, it’s just, it’s, it’s crazy. I mean, the most cautious approach would be to go take a long-term like a five-year or 10-year rate. But you know, the variable so low. I mean, I just, I can’t see it jumping so crazy that it that it would affect a lot of people. A variable has always been the way to go. But yeah, if you’re cautious and optimistic and worried about things obviously lock-in, I mean, I think even tinier your money ten-year money right now is just still ridiculous. Cheap, right?

Jeffrey  :

You know, if you’re thinking about fall and you want to get pre-approved, maybe go ahead and get that 120 day pre-approval, which will carry you into the fall. And, you know, you’ll have a bit of a, a bit of security if you do want to seriously start house hunting in the fall.

Patrick  :

Yeah, definitely. I mean, you definitely want to get pre-approved. I mean, we had a client tell us that their main pre-approval, but wouldn’t, wouldn’t allow them to buy anything with other conditional on finance. It’s just, you know, some banks are still doing that and it’s, it’s just not in the corner. I mean, it hurts, hurt the buyer puts them behind the 8-ball. It’s a bit frustrating when, when, when you’re dealing with something like that, but yeah, definitely pre-approvals are, are, are, are a definite must always have been. And yeah, lock it in now we can.

Jeffrey  :

So finally I know we’ve said over the past three, five years, the crystal ball is broken. It’s now rolled off the table under the couch. Any, any sort of predictions for, for the fall and maybe into 2022?

Patrick  :

Well, like you said, I mean, like I broke my crystal balls, but I think it’s slowly getting back together. So, I mean, if I had to make a prediction, I’m like who the hell knows? I will say that, like I said, I think we’re now heading back into a more traditional market, assuming everybody gets, we start to open up normally. And if we don’t have another lockdown, which scares the heck out of me in the fall I think we’re going to have a good fall market. And then I think it’s going to be a good spring market as well. I mean, honestly, and when I say good, does that mean that we’re going to see these crazy price increases that we’ve seen? I don’t think so. But I think it’s going to be a very healthy market and hopefully there’ll be some more supply as well for those buyers.

Jeffrey  :

Fantastic. So once again, keep fingers and toes crossed on that. You don’t see any strange developments and if any of our listeners do want to get a hold of you, what’s the best way to get ahold of you?

Patrick  :

Yeah, email’s always the best. mail@patrickrocca.com. Or you can call me directly at my office at 416-322-8000.

Jeffrey  :

All right, well, thanks again, Patrick. It’s been a pleasure. Definitely try to relax a little bit over the rest of the time you’re out of the city and we will definitely talk soon.

Patrick  :

Thank you so much.  Have a great day.

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