Don’t be so Quick to Blame Mortgage Changes Completely for Decline in Listings
It’s no secret that the Toronto housing market is slowing down. While prices are still edging up in many markets, there’s no arguing that sales are down. And it’s just as futile to argue the fact that MLS listings are also down – typically just another sign of a softening. But industry experts are saying that looking at MLS listings alone isn’t a good indication of how many properties are actually exchanging hands. And that it’s important investors and buyers consider looking at other avenues, such as pocket listings.
First, how sharp was the decline in MLS listings?
Sharp. During March 2013 Greater Toronto Area Realtors reported 7,765 transactions throughout the MLS system. That’s down significantly from the 9,385 that was recorded during March of 2012, a total of 14 per cent.
Some have been blaming tighter mortgage rules on the slowdown in listings, while others say that the market cooling is because of this shortage of MLS listings. The Toronto Real Estate Board says that it’s both.
“While some households have put their decision to purchase on hold as a result of stricter lending guidelines or the additional Land Transfer Tax in the City of Toronto,” said Ann Hanna, president of TREB. “Other households simply haven’t been able to find the right house due to a shortage of listings in some market segments.”
However, industry experts say that if MLS listings alone are the only factors being considered, the housing market is being done a great disservice. And investors and buyers are too, if they also ignore the other factors at play. One of those factors in particular – pocket listings.
“For multifamily investment properties, investors will have to look at pocket listings and other private sites to get those listings,” says Tahani Aburaneh, author of Real Estate Riches. “A lot of Realtors are now keeping them off of the MLS, because they are in high demand and they sell easily.”
Those ‘pocket listings’ are also often called ‘private listings’ or ‘exclusive listings,’ and you typically only have access to them through Realtors that know somebody that know somebody. The fact that these properties are in high demand and sell easily is inarguable, with exclusive listings often selling hours after a seller tells a Realtor about them. They are typically in highly desirable locations, have highly sought-after features, and are close to amenities. Sellers know they can get a higher price for them, especially if they have the ‘exclusive’ tag attached to them.
Looking at pocket listings isn’t just good advice for investors, but for buyers too. Ask around to different Realtors that you know, or just put a word in with the Realtor you’re using. Typically they have an ongoing list of these ‘pocket listings,’ and it could hold that perfect opportunity you’ve been looking for.