Features of Balanced Markets

One way to evaluate whether a market is considered a seller's market, buyer's market, or balanced market, is to look at the months of inventory (MOI). MOI measures the relationship between supply (homes available for sale) & demand (homes selling) in a market. Active listings divided by the number of sales in a certain month = months of inventory. MOI estimates how long it would take for all of the current inventory to be sold if no new homes were listed. 0-3 MOI typically represents seller's markets, 3-6 MOI typically represents balanced markets, and 6+ MOI typically represents buyer's markets.

For example lets check in on the February MOI for detached homes in some key GTA markets: Oakville: 5.27 Burlington: 3.24 Toronto: 3.78 Mississauga: 4.46 Hamilton: 4.36 Milton: 3.74 All of these markets would fall within the balanced market range. However there is a real variety in terms of where each community lands within the balanced market range. These are still quite broad areas, and micro markets exist within each municipality. For example, certain areas of Oakville have a low MOI, and well priced homes attract high attention and even multiple offers at times.

Characteristics of a Balanced Market: • Higher inventory = more choice for buyers • Higher days on market, less multiple offer scenarios = less pressure for buyers • Due diligence for buyers. Buyers are more likely to visit a property 2-3x before offering, and are more likely to have conditions accepted (financing, home inspection, status certificate review for condos) • Negotiation is common • Calmer environment allows for both seller and buyer to enter into agreement with clearer heads. Can help reduce legal issues in some areas • Longer average days on market • Buyers are price sensitive

Balanced is healthier in the long run versus an extreme seller's market or extreme buyer's market. For most sellers in the Greater Toronto-Hamilton area, they are operating in a balanced market. Homes are selling and there are active buyers. However, buyers are price sensitive due to the lessened pressure they feel, and the perception of choice & control.

If you are both a buyer & a seller, it can be intimidating to set out on a plan to move. We can help you make decisions on how to best approach this environment. Please call with any of your questions! As always we appreciate your referrals to friends & family. Cheers, Joe, Doug & Randal Real Estate Team