Speaking with some realtor friends the past week about the softening market this summer in Ontario. Sellers who need to move or downsize their costs are finally starting to reduce prices, but the realtors are complaining that many are so far still holding out for that one last dumb price-indiscriminate buyer to arrive from Asia or Toronto or anywhere else.
The buyer madness of April has sobered since. The average sale price in my home town of Barrie, 1 hour north of Toronto, has retraced nearly 22% from a peak of $562k in April to $440K at the end of July. Apparently August has weakened furthered. But having spiked a crazy 40% in just the 8 months from August 2016 to April 2017, the mean reversion cycle here must be barely started.
Nationally, we have this interactive chart from the CREA for some comparables on each province as at the end of June. The national price year over year was nearly flat in June, so August data may well bring a slightly negative year over year number when the data is updated.
Certainly a -40% style price correction nationally like we saw in the US 2004-12 cycle is due here. Unfortunately, Canadians are the most unprepared– indebted and under-saved–they have ever been. At the same time, what little savings they do have is once more wagered in precariously priced financial markets. All risk, little cash, no cushion= rough ride ahead for the masses.
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