At some point, most of the conversations I’m involved in turn to the weather or real estate, and usually both. It’s not that I’m limited in terms of what I can talk about, at least I hope people don’t think that, but more so that these subjects are easy and good ice breakers. (If I had to talk only about real estate or the weather I think I’d pretty quickly stop talking altogether.) Since we always talk about real estate, I thought we’d change things up and talk about the weather today.
Did you know that the average daily maximum temperature in Toronto in February 2018 was 2.6°C? And that the average daily minimum temperature was -6.2°C? It rained on 7 days and snowed on 13 days in the month. By contrast, in February 2017 the average daily maximum temperature was 3.5°C (almost 30% higher) and the average daily minimum temperature was -3.9°C (close to 90% lower). Quite the change from 2018. And it rained on 8 days and snowed on 12 days. Very interesting.
Based on this, it’s pretty easy to predict what the weather will be like in March 2018, isn’t it? What’s your prediction? Are you saying “How the heck should I know?” right now? Well, I’ll let you in on a secret: You have as good a chance predicting the weather based on past statistics as you do predicting what’s going to happen in the real estate market based on past statistics.
It’s the beginning of the month. If you like to keep up with the real estate market, you’re about to be besieged by all sorts of analyses and prognostications based on what’s been happening lately and last year. Want some advice? Ignore them all. (Unless they’re prepared by someone intimately familiar with your particular market and relate directly to your particular market. I’ll explain why later.)
True confession: I hardly pay any attention at all to the statistics or articles that come out each month. I know some people like numbers, and in some instances the numbers may be helpful, but they’re not helpful to me. I know my market so well that numbers barely scratch the surface of what determines prices and determining prices is at the very core of what I do, both when my clients are buying or selling. Besides, there’s no such thing as average in central Toronto. Every single house is different. I do care about the sale prices of specific houses, very much so, because those are extremely useful in determining prices, but the end of month or year statistics? No.
A $5m new home on Alexandra Boulevard is in a different market from the $3m older home next door. The 600 square foot condo downtown may as well be in a different city when compared to the 600 square foot condo at Yonge & Eglinton. Don’t think of a market as just a neighbourhood or a type of home. To determine a market you have to look at factors such as location, price, condition, type of housing and more to determine who the most likely buyers are. Every group of buyers represents a different market. To understand each individual market, you have to figure out how that group of buyers is going to behave and how the relevant sellers will behave. Are the buyers desperate? Do the sellers really want to sell? How many buyers and sellers are there in that market (supply and demand)? Sometimes you think you know which market you’re dealing with, but you could be dead wrong. For example, when you try to sell a two bedroom semi with no yard on a busy street in a family neighbourhood and you think you’re dealing with the market for renovated 3 bedroom semis on quiet streets in the same neighbourhood. Uh uh. Different markets. You really need to know what you’re doing!
I’ve said it before and I’ll say it again: the central Toronto residential real estate market is made up of countless niche markets. The only way to know the value of any particular property and what might happen in that market is to ask someone who has their finger on the pulse of that particular market and I don’t know anyone who has their finger on the pulse of all the different markets in this city. It’s impossible to do.
It’s up to you to decide if you want to read all the articles that are about to come your way. If I had to guess, they’ll probably say the market is trending downwards because February 2017 was much stronger than February 2018. No kidding. Last January, February and March were off the charts. They’ll probably say the same thing about March. But don’t be fooled. The central Toronto market isn’t trending downwards based on what we’re seeing on a day to day basis. There are plenty of buyers in the market now and more on the way. I’m expecting April, May and June to be very busy months for the residential real estate markets (plural) in central Toronto with prices continuing to increase. I don’t have any statistics to back that up. All I have is my instinct. Ever hear about the fisherman who knows where the fish are? I’m that fisherman. I don’t always catch my fill, but I’m usually pretty close.
There you have it – my take on last month’s statistics. I’d be happy to talk to you about your options if you’re thinking of selling in the near future. Also, if you know anyone who is interested in learning how the market works and would like to receive the kind of help that involves honest answers, straightforward advice, no pressure and being treated like family, please let me know the best way for me to connect with them because I’d like to offer them this kind of help. And as always, don’t be shy if you have any questions or comments about this post! Thanks for reading.