The Shifting Real Estate Market - Fall 2023

 🔥 With new builds catching fire 🔥

🏡  Homes sitting longer on the market 🏡

💰 Interest rates + the stress test hurting not only

buying power or how much someone can afford 💰

But also directly affecting homeowners with variable rate

mortgage products who have seen their payments significantly increase 👎

Hello, I’m Rochelle Edwards 👋

A REALTOR who loves sharing about the local (to me) real estate market!

(Oakville, Burlington, Hamilton + Surrounding Area)

Today we are taking a look some of the BIG changes coming to Ontario Real Estate

& some key pitfalls to be aware of when Buying or Selling in a sliding market. 

When chatting with clients lately, there’s a common thread of questions

& uncertainty about what's happening in the real estate market.

There are definitely some important things to know about a shifting market

& I want to bring some clarity on a few notables for you. 

First, Overpaying is a real risk for buyers.



It’s risky because if you make an offer & say “I’ll pay $1.2M” but then on closing day, the bank decides it’s only worth $1M... you’ll need to cover what is called the appraisal gap.

So in this case, you’d need to come up with $200,000 in addition to your down payment & closing costs. 

Can’t come up with that kind of money?

Don’t plan on it going well… 

Once the Seller’s Lawyer is aware you intend to breech or did breech your offer contract, it will trigger a sequence of events. 

First, you can try for an extension as the Buyer, but expect to have some penalties for the trust the Seller would put in you to actually close after the additional time. 

If you still can’t close or don’t negotiate an extension, the Seller will relist the property & try to sell as soon as possible. If a new Buyer commits & offers less than your $1.2M offer, you’ll not only lose your deposit, you’ll also be sued for the difference in purchase price + additional expenses incurred in the process.

We are talking hundreds of thousands of dollars in losses!

It can absolutely be devastating, so please work with someone you trust to know how to help protect you. 

- RISK FOR SELLERS -

Sellers in this situation… it’s important to know that if you are buying a home with the money from your sale, you’d potentially experience the same crisis on your purchase by failing to close. 

It’s important to remember: The highest-priced offer is not always the best offer!

- Selling During Market Correction -

Now Selling during a market correction is not without its challenges… 

Last year as the first interest rate hikes came into effect, I had some wonderful clients who were caught in that shift. They had finally found their perfect home to buy even in the busy market where dozens of offers on each home were the norm. 

They were so on top of what needed to be done & my team was so efficient that they had their home on the market in a flash. Just before they went live, that first rate hike announcement was made. 

What should have sold in the blink of an eye went 52 days on market before selling well below the initial market valuation. They were stuck between a rock & a hard place not wanting to breech their purchase contract, but needing to get a certain amount to afford their new home.

In this case, their saving grace was our marketing but also, their willingness to be pragmatic & price the home competitively. Whenever the market depressed further with worried buyers, they were quick to reposition the home & work with us to market extensively. 

In order to make sure the buyers of their home could close, we also marketed the buyer’s home, with permission, even though it was listed with another REALTOR®. It’s the cooperation of people working together & REALTORS® who know what’s happening in real estate, that makes for happy endings with market shifts. 

- SKEWED STATISTICS -

Next, I want to talk about statistics…

You’ll see lots of things quoted, but the data can be easily skewed.

Case in point, there was a home with a list price of $235,000 & a sale price of $2,205,000 - that’s 938% over asking. It’s typos like this that can seriously skew statistics that are taken at face value. 

Want to know what’s happening in your local market?

Don’t turn to national or large-city news.

Turn to your local, boots-on-the-ground REALTOR® who works in your community.
They are your best resource for accurate information about your home. 

Of course, I’m here if you’re looking for some information on the western shores of Lake Ontario!

- CONSUMER PROTECTIONS -

Now let’s take a moment to talk about Consumer protections…



There has been a lot in the news lately about REALOTRS® behaving badly.

They are the exception but with around 96,000 registrants in Ontario,

the likelihood of coming across a bad actor has increased in recent years. 




So consumers started complaining, as they should, and while there are quite a few great  REALTORS® working to improve professionalism by bringing back the standards & ethics that the public deserves, the push to improve consumer experience has been an uphill climb for the leaders in organized real estate.

There are a lot more reasons why this is the current state of affairs but I won’t deep dive here…

However, I will cover some of the changes coming your way.

First, the old legislation known as REBBA 2002 is being replaced with TRESA or Trust in Real Estate Act. It’s something leaders within organized real estate have been fighting for since 2009 & we are finally updating the act to better protect consumers/offer more transparency. 

That more open approach comes in a few forms…

First, A Consumer Information Guide created by the Real Estate Council of Ontario that will help clarify the different relationships you can have & how it affects your options when working with a REALTOR®

There will also be an increase in clarity for consumers on obligations & disclosure requirements.

There is also the opportunity for offer transparency where a Seller can choose to keep the terms of an offer open to the public while still protecting the identity of the Buyer. 

There will also be reforms for the Code of Ethics to push for a principal-based approach & we are looking to broaden the powers of the discipline committee so those bad actors have impactful repercussions for breaching the Act or code of ethics. 

If you’ve had a bad experience, you can connect with the

Real Estate Council of Ontario to file a complaint

against a REALTOR® and/or their Brokerage. 

I cannot express enough how important it is to choose a

trustworthy REALTOR® to work with & if you need a

recommendation for someone in your area, please reach out!

- HOME AFFORDABILITY -

So what about home affordability?

House prices have almost tripled in 10 years across Ontario while income has not even come close to that kind of growth! 

This is the very reason Canadians are uniting behind a crisis need for more housing…

But what solutions are there?? 

Well, unfortunately, there is no silver bullet answer, but rather we need a multitude of solutions working together. 

Also, keep in mind, the term “affordable” when it comes to housing, means 30% or less of your monthly income.

 In Ontario, we are looking at ~$23/hr minimum for many areas

& ~$25/hr in the Greater Toronto Area to meet the basic cost of living needs.

First, leaders in organized real estate advocated for your rights & were appointed a position on the Ontario Housing Affordability Task Force where they took an extensive look at the many facets impacting affordability & ways to combat it. 

Some of the key items worth noting are:

That there is a lot of red tape in passing permits & adjusting zoning bylaws.

If a community only allows single dwellings or duplexes but someone wants to take a large lot & build 5 townhomes, the zoning would likely need an amendment. This can take months or years. 

There are also many communities where you can’t build an in-law suite due to zoning regulations. Same with permits… builders can wait years for community input, permit applications & amendments required. 

With all of the permitting processes & taxes on new builds,

the cost of “doing business” is passed along to the consumer.

And while it can be easy to call builders greedy, their profit margins are not as lucrative as you might imagine.

If we need to build 1.5M homes in the next 10 years, the red tape around getting shovels in the ground needs to be expedited… this is why there is a deep dive into the 2-tier government structure of Halton Region.

It’s an effort to streamline & stop duplicate processes. 

But in Ontario, there is a shortage of 100,000 skilled trades workers to build those 1.5M homes.

A big driver of this need is that more than 80,000 tradespeople are slated to retire in the next decade alone. 

There is also the Building Homes Faster Fund which was a recommendation by the Ontario Housing Affordability Task Force that has come into practice. The fund offers financial support to municipalities that meet the requirements for the increase in housing supply over the next 3 years.

This $1.2 Billion fund offers significant incentives for municipalities to hit their housing targets. 



There is also a focus on reducing short-term rentals at a Provincial level -

these include AirBNB & Verbo rentals.

This method of investing pulls long-term housing options from the market in favour of multiple short-term stays each month, which generally brings in more profits for the owner without worrying about landlord restrictions.

The Federal Government is also looking at limiting Student Visas as there are a lot of schools that advertise to foreign students but do not offer student housing options which is impacting the local housing stock. 

There was also a lack of information on the Rental market because no database existed to track what was happening in that sphere. With backlogs in hearings for bad actors in the rental market, lack of information on tenant experiences & costs associated, it’s been long overdue but the Ontario Rental Housing Study was completed in  September 2023. 

The report sheds light on some of the negative impacts that tenants face & with some landlords raising rents by incredibly large amounts, there is a call to review policies to better protect tenants from exorbitant increases.

Want to make an impact & protect affordable rentals?
Add your information to the Rental Registry!

Now I do want to mention that it’s unlikely we will see a 90’s style recession drop in prices because the demand for people who are

trying to get into the market is still so high. 

So you can expect to see some softening in the prices, more options for Buyers in terms of inventory,

thankfully, and more skill will be required of REALTORS to bring deals together. 



Using a knowledgeable agent you trust will continue to be so

important for navigating the market. 

There’s definitely more to this that we could cover today, but I’ll leave it here for now as it can be a lot to digest all at once.

If you have any questions about the area or are thinking about a move,

I'd love to connect & hear more about your goals.

It's a no-pressure chat to get to know where you are in the process

& connect you to the right people if my skillset doesn't align with your plans 😊

Until Next time, Keep it genuine!

Rochelle Edwards | Broker

S. Todd Real Estate Ltd., Brokerage

Hello@GenuineRealtor.com

Office: 905-639-3300