If we understand that there is no “one” market, it means that there are buyer opportunities in certain areas, certain housing types and certain price points. Here’s where those opportunities are right now.
The most accurate way to identify opportunity is to look at the average sale price to list price ratio. In plain language, how close to their asking price did sellers get? The less they got compared to their asking price, the more there is opportunity to buy at a discount. We reference MLS areas and communities, so a map of the TREB area might be helpful. You can find it here.
All of the below recommendations are based on the most current data as of the time this article was written (December 20, 2019) and markets change over time.
Here’s where to buy.
When we look at the average sale price to list price ratio for all of the TREB area (Halton, Peel, Toronto, York, Durham, Dufferin and Simcoe), it currently stands at 99%. So, where do opportunities exist?
- In Halton, the best place to buy right now is Oakville, which is seeing an average sale price of 3% less than the list price.
- In Peel, it’s Caledon where bargains can be had, which is seeing an average sale price of 97% as well. Again, that’s a 3% discount on the list price.
- In Toronto, it’s the central part of Toronto that is seeing the best opportunity, with a 99% average sale price to list price ratio. 1% off the list price might not seem like much, but given it’s 101% in Toronto West and 103% in Toronto East, paying less than asking price in Toronto Central sounds good. Given Toronto central is a pretty big area, we’ll define it a bit narrower and say Toronto C12 is the place to buy right now. The average sale to list price ratio there is 93%. This area includes York Mills, St. Andrews, Silver Hills, Hoggs Hollow and the Bridle Path.
- In York, we find the best opportunity in King, where the average sale price is 5% less than the asking price.
- In Durham, Brock is absolutely the place to shop for a home, as the average sale to list price there is 88%. The next best opportunity is in Scugog, which is where we’re seeing 96% of list price being paid. A 12% discount is better than a 4% discount, so definitely stick with Brock.
- In Dufferin, Orangeville is showing a 2% discount on prices, with a 98% sale to list price ratio.
- Finally, in Simcoe, Adjala-Tosorontio is the place to be, with an average sale to list price ratio of 94%, compared to Simcoe as a whole, which has an average sale to list price ratio of 97%.
If you’ve got total flexibility on where to buy, then the township of Brock in Durham region is the place to shop right now, with an average sale to list price ratio of 88%. That’s 12% less than what sellers are asking for, which means there are real opportunities for savings in Brock right now.
Here’s what to buy.
If you’re more interested in the type of housing where there is an opportunity to get a bargain right now, then we need to look at what’s happening to sale to list price ratios for detached, semi-detached, townhouse and condos right now.
- For detached homes, the average sale price in all of TREB is 98% of list price.
- For semi-detached homes, it’s 102% on average, which means buyers are having to pay 2% more than the asking price.
- For townhouses and condo apartments, it’s at 100% on average, so buyers are paying more or less exactly what sellers are asking for in terms of a sale price.
It’s pretty clear that across all of the TREB area, detached homes are where there are opportunities right now. These price points will of course be higher than the other types, but it seems like sellers are having to take a lower price (2% less than asking on average) to get a deal done.
As a bonus, if you’re open to where you buy a particular type of housing, here’s the best opportunities for each housing type right now.
- For detached homes, Brock township in Durham region is once again the best location. The average sale to list price ratio for detached homes in Brock is 88% right now.
- If you’re looking for a semi, the C12 area of Toronto is a bargain as well, sitting at 88% on average. There aren’t many sales of semi-detached homes in the area, but when they do come on the market, they don’t have many people interested apparently.
- For townhouses, the best opportunity is currently in the W04 or C14 areas of Toronto, where you can get an average of 6% off the list price. W04 is the area south of the 401 and north of Eglinton and west of the Allen Expressway over to about Weston Road. C14 is north of the 401 up to Steels and east of Yonge over to Bayview.
- For condo apartments, we have a few areas where buyers are getting big discounts, but there was only one sale so it’s not really reliable. The area that saw the best opportunity with a number of sales at a 96% average sale to list price ratio was in the Toronto C02 area. That’s Bloor up to St. Clair and west of Yonge over as far as Ossington.
While price points may be higher in Toronto versus the GTA, it is interesting to see that there are some opportunities for good discounts within a few parts of Toronto.
Here’s your price point to buy.
Finally, let’s look at what is happening in different budgets. One of the most common misconceptions about real estate is that what is happening in one price point is similar in other price points. Sellers who hear about how hot the market is on average are often unpleasantly surprised to find out that in their price range things are quite different.
Aggregate data on what’s happening in different price points is difficult to gather and we need to make some variables constant in order to have useful results. Rather than say what price points across all of the TREB areas have opportunity, we need to pick a housing type and an area. If we don’t do that, the results include such a wide range of housing types (with wildly varying price points) and geographic areas (again, with a tremendous range in average prices) that they are so general as to be useless.
Let’s take a look at what is often considered the holy grail of real estate in the GTA, a detached home in Toronto. Here’s what is happening in the most common price ranges.
There is a clear point at $1M where the market for a detached home in Toronto changes. If you’re looking to buy a detached home under $1M in Toronto, expect to face some competition and pay more than the asking price. When you start getting over $1M, that begins to drop and by the time we hit $1,250,000 in prices, the homes are selling for under asking.
A big opportunity exists right now in the $1.5M to $1.75M range, where buyers are getting about a 2.7% discount. This is interesting as there is often a presumption that the higher the prices, the lower the competition. As we can see, when we by in the $1.75M to $2M range, that discount basically disappears.
It is possible to do similar analysis for every price point for a particular type of housing and geographic area and it will show the price points where the market is facing stiff competition as well as those areas where opportunities for buyers exist.