RE/MAX Hallmark Realty Ltd., Brokerage | Direct: 416.508.9513 | Office 416.699.9292

NEWS

March 2018 Market Review

Well, the TREB stats are out for March, and so are the breathless headlines! I was going to comment on a few of them, but the thought gave me a headache. 😉

While sales volume fell significantly year-over-year (down about 40%), one has to remember that at this time last year the market was still in the throes of utter madness. Very low supply had fuelled aggressive bidding by buyers, which caused a feeding frenzy of sorts, and that rapid price spike that I have referenced before. Compared to that period, the current market is a picture of serenity! Prices pulled back last year in/around April-May-June. Basically, comparing March of 2018 to March of 2017 is a bit pointless, because last year was an anomaly. I think that we’ll get a better sense of the true state of things when we see the April and May reports.

Nonetheless, the fact is that the average sale price was lower in March than it was last March, about -14.3%. Sales volume was down across all housing types, but the average price for a condo in the 416 was actually up 7.1%, again indicating that buyers have adjusted to high house prices by looking at the condo option. The average price for a detached house is now about $1,293,903, down from $1,561,780 at the same time last year. Keep in mind, though, that the price spike last year was +32.8% over March, 2016! That was obviously unsustainable, and it’s a good thing for the over-all market that those conditions only lasted a few months. The average sale price for a detached home in 2016 was $1,174,358; this year’s average is up about 10.2% since then, which I think is quite reasonable.

Keeping with the theme of looking back at 2016 for some perspective, overall, the average sale price in March 2018 is up 14% over March 2016, which tells me that we are in good shape.

The number of new listings dropped from 16,978 to 14,866, a decline of 12.4%. That might be because sellers were afraid of diminished returns, or it could just be a coincidence.  Even so, the number of active listings basically doubled, from 7,865 to 15,971. Again, that’s a good thing. There were 12,132 listings in March of 2016, which was down from 15,295 in 2015, so we are basically back to 2015 levels. Enough supply means that buyers have a better chance to buy what they want/need in the area where they want to be, and that’s a sign of a healthy real estate market.

Now that March Break and Easter are behind us, and the market has had time to absorb the new federal mortgage ‘stress test’ rules and the provincial housing regulations, I’m hoping that we get going with the spring market! If you plan to buy or sell any time soon, feel free to get in touch.

February 2018 Market Review

Once again, there’s a lot of noise and nonsense about the Toronto real estate market. Headlines with words like “plummet” and “slump” make it seem as though the market is in bad shape. It’s not.

Firstly, we typically compare a month (e.g. February) to the same month a year earlier. That’s usually a good measure that captures relative seasonal ups and downs – an apples-to-apples comparison – and it’s a long enough time frame to give us a view of the direction of things. However, when something unusual happens, like the massive price spike we saw in the first quarter of 2017, that measure gets skewed. Last February saw prices jump up 27.7% over February 2016. That was crazy, and it was a good thing that the market came back down in the following months. As I have written previously, 2017 was quite a roller coaster, so as we go through 2018 and do our usual one-year-ago comparison, we have to keep that in mind.

So, saying that the market is in negative territory is wrong. We have to take a broader look – or, put another way, look back a little further, and see how current prices look longer-term. TREB did that in their monthly report. Compared to February 2016, when the average sale price was $685,278, we are up 12%. Not too shabby.

Now, let’s look back over the last few months. The average sale price back in November was $761,757; in December it was $735,021; in January, 2018 it was $736,783; February was $767,818. I think the numbers over the last few months reflect the typical seasonal dip that happens every year. Situation: normal.

Secondly, we also have to look at the segments. It’s certainly very interesting that sales of fully and semi-detached houses were down, as were their average sale prices. The number of sales of townhouses and condos were also down, but prices in those segments were up. As mentioned, the average price in February worked out to $767,818, compared to $876,363 last February – a drop of 12.4%. But, the average townhouse price was up 15.5% and condos were up 10.7%. It seems to me like buyers have shifted away from the highest priced housing types and ‘substituted’ for smaller, cheaper options.

Also of note, the number of new listings edged up slightly, but the overall number of listings increased significantly (147.4%). This serves as a reminder of how tight the market supply was at this time last year. Let’s look at available listings in February over the last several years:

2013 – 15,969

2014 – 14,019

2015 – 12,793

2016 – 10,902

2017 – 5,400

2018 – 13,362

This is why I’m always stressing that supply is a big problem: it declined steadily for five years, then dropped like a stone last  year, and that naturally caused a price spike. Getting the supply back up is key to a healthy market, and we are getting there.

The ‘spring market’ is warming up, too, although this week is March Break, which is usually a bit slower due to travel, etc. I check listings and sales every day, and it looks to me like sales are happening quicker than last month, and usually for over asking. That tells me that there are lots of buyers out there. They now have some more selection, and that is a good thing. Pretty soon the market will have adapted to the latest new mortgage rules, the weather will warm up, and we’ll be able to put ‘bad news’ behind us for a while. 🙂

 

January 2018 Market Review

You may have heard that ‘sales were down’ in January, with the implication that that’s a bad thing. As anyone actively involved in the Toronto real estate market knows, the market is not ‘down’ at all. In fact, it’s crazy busy out there.

The first thing to note is that January 2017 set a record for sales activity with 5,155 sales. So, anything short of a new record would be down, right? I have said before that we don’t have to break records every month to have a great market, and this is another such example; 4,019 sales is decent. For comparison, January 2013 saw 4,375 sales – way below last year, and not much above this year. I’d say that January 2018 looks fine.

The next thing is that January is a relatively slow month, compared to May or October, so fluctuations can be exaggerated. Having 22% fewer sales sounds dramatic, but it’s only about a thousand sales – easily made up at any point throughout the rest of the year.

The good news that I see in the January 2018 stats is the big increase in supply. At the same time last year there were only 5,034 listings on the TorontoMLS. This year we had 11,894, which gave buyers more choice. Looking again at 2013, there were 14,231 active listings in January of that year, so supply could easily go up and still be below past levels. If this year’s increased supply can be maintained – and improved upon – throughout the year we could see a more moderate market, which would be a nice change….

Speaking of moderation, the average sale price dipped by about 4.1%, to $736,783. However, TREB’s weighted average was UP 5.2%, reflecting the number of sales of condos compared to houses i.e. more condos (which are cheaper than houses) sold. Moderation in the price of single family detached (the most expensive type, and the only one that saw a price decline), combined with price increases in other housing types, shows that the market has naturally adapted to high prices for detached houses. I doubt that government intervention had anything to do with that…. 😉

The condo market is nuts these days. Not only did my own condo listing get swamped (over 130 showings in a week, and 11 offers on ‘offer night’), but showing condos to other clients is a gong show. Getting appointments is sometimes tricky, and it seems there’s always at least one other agent poking around the same unit, meaning we sometimes have to wait to get in to see a place. The activity is reflected in the average sale price going up 15.1% last month, despite fewer sales. The condo market remains an attractive segment.

This week precedes a long weekend (Family Day), so we probably won’t see much action, but I expect the market to keep chugging along next week and for the rest of the spring market. If you want/need to buy or sell, feel free to get in touch. 🙂

 

SIMON MILBERRY

About

Buying and selling a home can be tough, especially in today’s challenging market.  But, it can also be fun – an exhilarating adventure. I understand both the joys and heartaches of finding (and getting) that perfect home. As a homeowner with a young family, I’ve been there and done that. I also have the professional know-how that years of working in the Toronto real estate market has developed.

Over the years (since 2001), I have represented clients in the purchase and sale of condos, starter homes, move-up houses, luxury homes and small businesses. (Although Commercial real estate is not my core business, I am usually working with one or two Commercial clients.) My knowledge and experience make the difference for my clients.

My clients are my focus, but a Realtor can’t get much done if he doesn’t develop strong professional and personal relationships within the industry. In today’s market, characterized as it is by very tight supply, I find that one of the most important aspects of my business is networking with other Realtors. I am constantly digging for opportunities for my clients. This results in off-MLS transactions that serve the needs of both the buyer and seller.

As a father of 3 boys and 1 little girl, I take a family-friendly approach to my business dealings. That means flexible appointments and easy scheduling; feel free to bring the kids! I endeavor to make the whole process as smooth and stress-free as possible.

Ultimately, the objective is to enhance your life by finding you a new home that suits your needs of today and into the future; and selling your existing asset for the most money and with the best terms possible. Together, we’ll develop and execute the right strategy for you and your specific needs.

Much of my business comes to me by referral, so I’m not limited to any geographical area.  My focus is on meeting the needs of my clients, wherever they may be. Call me today, and let’s get to work on your real estate goals.

Community

RE/MAX Hallmark is a big believer in giving back to the communities we serve, and I am happy to participate in three of our most important programs.

Every time I do a transaction – buy, sell or lease – I make a direct donation to theChildren’s Miracle Network. RE/MAX agents are leading donors to the CMN, having raised $52 million dollars in Canada alone since 1992. When you do your real estate business with me, we contribute to that growing total.

We do the same for the Canadian Breast Cancer Foundation. Again, RE/MAX is a major sponsor of the CBCF, and makes it easy for us to contribute directly to the important work they do. A portion of every commission I make goes directly to the CBCF.

I also make a monthly donation to the breakfast program operated by the Toronto Foundation for Student Success. We all know how important a good brekky is – and how many kids wouldn’t get one if it weren’t for programs like the TFSS. With four kids of my own, this one is close to my heart.

You need an experienced, full-time professional Realtor – that’s key to a successful real estate transaction. However, I want you to know that, not only am I going to take care ofyou, but together we’ll help take care of others!

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Simon Milberry, Sales Representative at RE/MAX Hallmark Realty Ltd., Brokerage

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2237 QUEEN STREET EAST
TORONTO, Ontario M4E1G1

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Business: 416.699.9292
Fax: 416.699.8576
Mobile: 416.508.9513

 

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