April 2022 Market Review
As happens from time to time, the Toronto real estate market has entered a pause. Lots of voices are pointing to increased mortgage rates, and that’s a factor, but I think there’s more to it than just that. The market was incredibly competitive for the first few months of 2022, and that may have led to some ‘buyer fatigue’. We see this regularly: buyers who have bid and lost a few times decide to take a break (if they can!) and let the market calm down a bit. Considering that the winter months tend to have fewer listings, and we know that the spring brings a wave of new listings, taking a break at this time of year makes sense. So, with some buyers taking a step back, we see the number of listings catch up a bit, thus giving the buyer segment more choice, and sometimes leading to a moderation in selling prices.
Now, that said, there’s a flip side to such market corrections: sellers who don’t have to sell right now may decide to take their homes off the market, rather than sell during a soft period. We’ll see!
Either way, sale prices are still going up, despite a decrease in the number of sales. Active listings* increased 12.3%, from 11,668 in April, 20021 to 13,098 this year, which is a good thing, and expected for this time of year. But, at the same time, the number of new listings throughout the month decreased from 20,841 in April, 2021 to 18,413 this year, a drop of 11.7%. While sales decreased from 13,613 last April to 8,008 this year, a steep drop of 41.2%, the average price increased 15.0%, from $1,090,414 last April to $1,254,436 this year. That’s down compared to the average selling price of $1,300,082 in March 2022, but indicates that the market is still quite tight on supply. (Fluctuations month-to-month are not uncommon, but the general upward trend year-over-year continues.)
So far, May appears to also be a slow month. The long weekend might have something to do with it, and we could see a busy end to the month. We can also expect June to generate lots of listings, so the spring buying season should keep going for another 6-8 weeks. I’ll keep you posted!
One last thing: with market corrections, we usually see bank appraisers very quickly take a more cautious approach to their valuations. This can lead to last-minute problems with the financing necessary to close deals. Always make sure that you talk to a good mortgage professional before you buy, and maintain communication in the weeks leading up to the closing of your purchase. There’s a solution to every problem, but if you don’t realize there’s a problem until the last minute, you’ll have a headache on your hands! 😉
*All stats are from the Toronto Regional Real Estate Board’s Market Watch report.