Posts in Market Review

December 2019 Market Review

January 28th, 2020 Posted by Market Commentary, Market Review No Comment yet

The Toronto real estate market had a decent December to close out 2019. There were 4,399 sales, up 17.4% over December 2018. It’s worth noting, though, that 2018 was a very slow year and December of that year saw only 3,781 sales. For reference, December 2017 saw 4,876 sales, and 2016 saw 5,305 sales, so 2019 was more in line with those years, and did not represent significant net growth. So, a relatively busy December rounded out a year that saw total sales for the calendar year hit 87,825 – up 12.6% over the decade-low 78,015 sales that were reported in 2018. All good!

At the same time, the increase in prices *was* rather significant: up 11.9%, to $837,788, over $749,014 at the end of 2018. Again, I attribute this mostly to the supply issue. New listings were down 18.1%, to 3,531, and total listings at the end of the month were down 35.2% to just 7,406. At a time when sales activity was up over the previous year, reduced availability of homes to buy (down 2.4% for the whole year) caused prices to surge.

I also like to reference the MLS® Home Price Index Composite Benchmark from time to time. It weights sale prices by home type (e.g. detached, semi-detached, townhouse, etc.), so it helps to smooth out the impact of, for example, super-high-end sales. That measure was up by 7.3% year-over-year basis in December 2019. TRREB* has pointed out, though, that from June 2019 onward, the annual growth rate in the MLS® HPI Composite Benchmark accelerated.

Note also that there will be price fluctuations throughout any given year, so the end-of-year price could be higher than the average price for a whole year, which may seem confusing at first, but it makes sense. 😉 So, as noted above, the average selling price in December 2019 was up almost 12% year-over-year, but for the entire calendar year 2019, the average selling price was $819,319, up a much more modest 4% over $787,856 in 2018. The ‘affordability’ issue is often exaggerated, but I think that a 4% annual increase is manageable for most potential buyers.

So, what to expect in 2020?! The economy is still pretty good (especially in Toronto), interest rates remain low, and I think there’s still a lot of pent-up demand for owned housing in the GTA. It’s still relatively quiet out there now but, based on the sale prices being reported this month, I think that we are in for another busy year in the Toronto real estate market!

*TRREB is not a type-o! The Toronto Board is now called the Toronto Regional Real Estate Board, which better reflects the territory covered by the Board.

November 2019 Market Review

December 6th, 2019 Posted by Market Review No Comment yet

The Toronto real estate market had a pretty hot November. Sales volume was up 14.2% over November 2018, at 7,090 units, over 6,206 last November. A fairly sharp decline in both new listings (8,650, down 17.9%) and total active listings (11,958, down 27.2%) put pressure on prices, driving up the average sale price by 7.1%, to $843,637.

All housing types experienced at least a small increase in average price:

Detached +4.9%

Semi-detached +0.3%

Row/townhouse +3.2%

Condo +10.9%

Condos once again lead the way! 😉

There could be a few reasons for the increase in activity, but it likely boils down to buyers having adjusted to the so-called ‘demand side’ policies of recent years, primarily the ‘stress-test’ that obliges new buyers to meet stricter mortgage requirements. Maybe they’ve saved a bit more over the past year or so, and more of them are ready to jump in, or they’ve switched their attention to condos (as I have suggested before), or looked to different neighbourhoods, having been ‘priced out’ of their top choices…. Whatever it is, it should come as no surprise that the market has adapted to the changing conditions – after all, that’s what markets do!

December is usually a very slow month in real estate, but coming off a busy November we may see continued activity and price increases. But, eventually, the market will quiet down for the holidays/New Year. Then, we should probably get ready for a busy 2020! 😉

April 2019 Market Review

May 6th, 2019 Posted by Affordability, Market Review No Comment yet

If you are active in the market at all these days (buyer or seller) you’ve probably noticed that things have picked up recently. Sometimes, we can feel it before the stats start to show it, and that’s basically been the case over the last couple of months, and now reflected in TREB’s April stats. Sales activity perked up significantly last month, with 9,042 transactions reported, up 16.8% over the 7,744 sales we saw in April of 2018. New listings also edged upwards, hitting 17,205 for the month, 8% more than we saw last April. Still, by the end of the month there were just 18,037 (including listings already on the market at the start of the month), actually down a touch from 18,206 last year. That means that, while new listings increased, the even greater increase in the pace of sales chewed into the inventory, and that usually foretells increasing prices….

Fortunately, prices are up only 1.9% over April 2018, with the average hitting $820,148 – still well below the peak prices we saw two years ago. Keep that in mind the next time you hear somebody complaining about ‘affordability’. Prices in Toronto are not skyrocketing; they are (for now, and for most of the last two years) trending upwards, which is a good thing. That said, if we continue to see tight supply, we’ll see escalating increases through the busy spring months.

The condo market had another strong month. Sales activity in that segment accounted for much of the action in the 416, increasing 2.6%; the average sale price surged 5.8%, to $637,181.

On a different – but related – note, I came across the Ontario government’s housing plan today. It’s basically about increasing supply – which stands in contrast to many of the demand-side moves that various governments have made to ‘cool the housing market’, for example tighter mortgage rules, the stress test, etc., all of which have made it harder to buy. I’ve long believed that dealing with supply is the solution, and although it will take a few years to work through the system, this plan could help….

March 2019 Market Review

April 4th, 2019 Posted by Blog, Market Review No Comment yet

This is interesting – the market was almost exactly the same in March, 2019 as it was in March, 2018! Check out these numbers:

Number of sales: 7,187 – just ONE fewer than March 2018.

Average sale price: $788,335, up just 0.5% over $784,514 recorded in 2018.

New listings: the biggest change; 13,996, down 5.1% from 14,753 last year.

Active listings: 15,576, down about 2.5% from 15,971 in 2018.

Condo sales: volume was down 14.1% in the 416, but the average sale price was up 2.3%, to $603,969.

One good sign for the market is that the number of active listings is up from 13,284 last month. Also, the average sale price last month was $780,397, so there’s been a bit of movement there, too. I think that those indicators point to a market that’s picking up steam for the spring. The spring usually generates more listings, which gives buyers more choices, thus drawing them into the game. Once that gets going, it usually rolls along until sometime in June, so we’re looking at two or three months of real activity. It’s a great time to buy and sell.

The fact that the market is essentially flat compared to last year contradicts the much-ballyhooed notion that Toronto is rapidly becoming un-affordable. In fact, prices are down significantly from that price spike we had in 2017. In March of that year, the average sale price was $915,126 and still rising. Since the correction that went through to about August of 2017, when the average sale price bottomed out at $732,292, prices haven’t gone up much – just about 7.7%, or a bit above inflation.

Of course, anybody in the market wants to see some price increases, and I expect that we’ll get back to the normal rate of 5-to-7% per year sometime in the near future. That’s both affordable for buyers, and it rewards home-owners for their investment.

 

January 2019 Market Review

February 11th, 2019 Posted by Blog, Market Review No Comment yet

As expected, January was a slow month in the Toronto real estate market. Just 4,009 sales were reported, up a wee bit from 3,987 last January. (For reference, there were 5,188 in January 2017; 4,640 in January 2016; and 4,318 in January 2015, so the last couple of Januarys have been on the slower side.) The average sale price was $748,328, up just 1.7% from $735,874 this time last year. Basically, the market has been flat since then.

New listings increased 10.5%, to 9,456, and total active listings edged up 0.6% to 11,962. Remember, back in early 2017 when we saw the beginnings of that crazy price spike, there were just 5,034 active listings at the end of that January – down from 9,966 in 2016. That really highlights how super-tight the supply was in early 2017 – and it shows how important supply is and what it can do to the market.

The townhouse segment was the only one to see an increase in the number of sales year-over-year (+4.4% in the 416), and it also had the highest average price increase (+12.3%). At the other end of things, fully detached houses saw the biggest drop is number of sales (-8.6%) and the only decline in average sale price (-8.8%). Taking into account the various types and weighting the averages, the MLS® HPI Composite Benchmark price was up by 2.7% – still basically in line with inflation.

We are still in a time of year when the market is less busy – and the weather can have a real impact. (Think of the last few weeks: cold, snowy, warmer and now cold and snowy again!) Even one or two bad days can slow down sales and make it look like market activity has dipped. February will probably be similar to January. However, for my part, talking to my buyer clients and to other agents, it seems like there’s a lot of demand out there, and lots of folks impatiently waiting for the spring market to get going so that they can buy something. Some of the sale prices I’ve seen reported in the MLS (well over asking) seem to support that. We’ll have to wait and see what happens over the next few weeks and months, but I think we’re in for a busier year and higher prices in the Toronto market.

 

 

December 2018 Market Review

January 11th, 2019 Posted by Blog, Market Review No Comment yet

December was a quiet month in the Toronto real estate market. TREB reports just 3,781 sales for the month, down 22.5% from the 4,876 reported in December, 2017. For reference, there were 5,338 sales in December, 2016, and 4,917 in December, 2015, so sales last month were well below what we have seen in recent years. The average sale price for the month was $750,180, up 2.1% from $734,847 in December, 2017.

TREB also released the annual stats, which deserve some comment. In comparing 2018 to 2017, it appears that the market is ‘down’ year-over-year. But, while the average sale price for the whole year declined 4.3% (for the whole of the GTA), that’s not because the market is trending downwards. Rather, it is because of the massive price spike that occurred in the first quarter of 2017, when prices surged roughly 30%, only to drop right back down to almost exactly the pre-spike level by mid-year. When those super-high sales are averaged over the whole year, they obviously draw up the average.

A more helpful approach is to look at what happened *within* 2018. The average sale price in January, 2018 was $736,783. By June it was up to $807,871, and then down to $750,180 by the end of the year. (That pattern is fairly normal: in January, 2017 the average sale price was $768,351; by June it was up to $791,929 and then down to $734,847 by December. This is generally due to the seasonal cycles of the real estate market.) So, while the market was definitely flat (which has its pros and cons…), it was not ‘down’.

By the way, if we back a little further, we see that while the market was at $730,472 in December, 2016, meaning we are up just about 2.7% in the last two years, the average price a year earlier was just $608,714, meaning we are still up 20% over the last three years. Clearly, 2017 and 2018 were unusual, but the longer-term trend is still strongly positive.

Part of the reason for the on-going strength of the Toronto (i.e. 416, excluding the 905) market is demand for condos. Although sales volume in that segment was down 23.9% from December 2017, the average sale price was up 11.4%, which is a significant amount. In fact, the only segment that saw a decline last month was fully detached homes, which has been a recurring theme this year. It looks like buyers have easily made the shift away from the most expensive home type, and found options among semi-detached, townhouses and condos.

There were just 4,308 new listings last month, a decline of 31.5% year-over-year, and just 11,431 listing on the market at the end of the month, down 11.6%. I think that we’ll continue to struggle with that kind of low supply in 2019. We can certainly expect that this month we’ll see a fair few listings that were taken off MLS in December come back onto the market, but it’s too soon to tell if we’ll get the kind of supply that we used to get. Either way, it’s usually a couple of months into the New Year before the listings start to tick up for the spring market.

Also, the Bank of Canada decided this week to keep rates steady for now, and that’s probably a good thing for the economy (which has some issues) and the real estate market. Unless (and/or until…) something external happens, the Toronto real estate market should keep humming along this year. With price increases at the low end of what we have seen in the last 15 years or so, buyers should be able to meet their needs; and with continuing demand, sellers will be able to sell. Overall, that’s what a balanced market looks like. 🙂

 

 

November 2018 Market Review

December 11th, 2018 Posted by Market Review No Comment yet

The Toronto real estate market had a slow-ish November, with sales volume dropping 14.7%, from 7,326 in November 2017 to 6,251 last month. At the same time, the number of new listings dropped 26.1%, from 14,260 to just 10,534, and the total number of listings dropped 9.8%, from 18,197 to 16,420. This dynamic (fewer sales, but with fewer homes available to buyers) resulted in a slight increase in the average sale price. The November 2017 average was $761,410, and that edged up 3.5% to $788,345 – a little above the Consumer Price Index (AKA ‘inflation’), which was 2.4% in October, 2018 (the most recent available number).

Sales volume for all types was down, but average price was up for all types except townhomes. The average sale price for semi-detached houses increased the most (17.2%), which could be an indicator that buyers continue to adjust to the high price of detached homes by choosing less expensive semis (which would increase demand in that segment and drive up prices). Condos had the second-highest increase (7%), which I think bolsters that argument, and suggests that the market can adjust to price spikes all by itself – no government intervention required! 😉

Regarding the number of available listing, it was down about 2500 from the previous month, which is typical for the last few months of any given year – things sort of peter out as we head into the Christmas/New Year season. Following that, the chill of winter can keep a lid on things for another month or two – it’s amazing how much bad weather can impact the Toronto market – but keep in mind that, although the market slows down, it never stops. If you really want to, you can certainly put out a listing now; and if you find something to buy, you have the choice of listing your current home immediately, or waiting ’til the New Year.

Check out TREB’s handy chart: MarketWatch_infographic_November

October 2018 Market Review

November 5th, 2018 Posted by Market Review No Comment yet

October was another solid month in the Toronto real estate market. TREB reported 7,492 sales, up 6% from October 2017. The average sale price (across all home types) edged up 3%, to $807,340. As I mentioned last month, prices have been relatively stable over the last six months or so, making now a good time to buy.

That said, it’s clearly not a ‘buyers market’. The number of listings just hasn’t increased enough to put us into that territory. New listings actually declined 2.7% to 14,431, while total available listings at the end of the month was up just barely (0.4%), to 18,926. Jason Mercer, TREB’s Director of Market Analysis, put it this way in the monthly Market Watch report (my source for all these numbers I quote in my monthly Market Review): “Annual sales growth has outstripped annual growth in new listings for the last five months, underpinning the fact that listings supply remains an issue in the Greater Toronto Area.” So, regardless of other, outside, influences like the OFSI stress test or rising mortgage rates, the Toronto real estate market has it’s own internal supply and demand pressures that keep driving prices up, a point I have stressed many times.

The 416 condo market (i.e. not including the 905 region) saw a slight increase in sales volume of 2.8% and a price jump of 8.6%. I’ve said it many times – condos are a great option!

The ‘fall market’ usually continues through November, so we’ve got plenty of time left in 2018. Of note, I was out showing houses on the weekend and bumped into four other Realtors at one house – a sign that there’s lots of action out there! Exciting times…. 😉

 

September 2018 Market Review

October 12th, 2018 Posted by Blog, Market Review No Comment yet

September was a decent month for real estate in Toronto. TREB reported 6,455 sales, up 1.9% over September 2017. I’d call that basically flat (i.e. stable). The average sale price hit $796,786, which was up 2.9% year-over-year. That basically the same as the inflation rate (the August rate was 2.8%). Note that the average price is basically the same now as it was in the spring: in April it was $804,584, and in May it was $805,320. Put another way, affordability – much talked about these days in the media and among politicians – is not running away from buyers this year.

The number of new listings dipped 3.1% to 15,920, and by the end of the month there was a total of 20,089 listings (of all types) available, up 5.6% over September 2017. We haven’t seen this many listings in the month of September in the GTA since 2013, when we had 20,194. After that year, September supply declined to a low point of just 11,255 listings in September 2016. Low inventory meant rising prices – the average sale price that month was up 20.4% year-over-year. The current level of supply is better suited to a balanced market.

Condo sales volume in the 416 area dipped 5.5%, but the average sale price jumped 11.7%. As I keep saying, condos are a good investment, either for living in or holding/renting out….

Sales volume and average price increased for townhouses and semis, too – but detached houses actually took a bit of a hit, going down 1.4%. Such a small change could be a reflection of the variety of houses sold; take out a few multi-million dollar sales and the average could come down slightly. We’ll see if anything significant happens over the next couple of months.

For now, it looks like a good time to be a buyer: there’s a decent supply of options and prices are stable. That’s not to say that it’s a bad time to be a seller. (It’s not as good as spring ’17 – but so be it.) A balanced market is good for sellers, too, as they can rely on a steady stream of optimistic buyers for their property. One of them will be the right fit. And, since most sellers are also buyers, a balanced market allows those folks to make the move they want/need to make, too.

The fall is usually a great time to ‘do’ real estate. If you’ve been thinking about it, get in touch with me and let’s get it done!

 

Summer 2018 Market Review

September 6th, 2018 Posted by Market Review No Comment yet

The summer months are usually relatively quiet in the Toronto real estate market. There are some obvious reasons for that – people change gears and shift their attention to fun activities, and lots of folks take every opportunity to get out of the city. That said, there are still plenty of sales happening, but at a less hectic pace. The other thing to keep in mind when looking at Summer 2018 is that, by this time last year, the big spike/correction excitement had settled down. As I mentioned in a previous post, we’ll get a better measure of what the market has been doing this year once we start comparing to the post-spike/correction months last year.

Let’s look at July, first: sales volume was up 18.6%, to 6,961 units. That’s probably a reflection of the state of things last July – which was basically shock about what had just happened: there were just 5,869 sales that month. For reference, July 2016 had 9,989 sales; July 2015 had 9,880 sales; and July 2014 had 9,198 sales. So, having just 5,869 in July of 2017 was quite low; the recovery this year looks sharp, but remains well below the previous few years.

The average sale price was $782,129. That’s a bit below the June average ($807,871), but is a normal, seasonal dip. More interestingly, it was up 4.8% from the July 2017 average price ($745,971). There were 13,868 new listings, a dip of 1.8%, but the total number of available listings was up 5.2%, to 19,725. If we get a few thousand more listings in the coming months (i.e. the ‘fall market’), we should have enough listings to make for a more balanced market.

July condo sales in the 416 were up 5.8%; the average price was $582,547, up 9.2%. In fact, the average sale price for all types (detached, semi-detached, townhouses and condos) went up, year-over-year.

August continued with the usual seasonal slowness, but still showed signs of improvement over last year. There were 6,839 sales, an 8.5% increase over August 2017. August of 2017 was similar to last July – in a bit of post spike/correction shock. There were just 6,306 last August. Again, for reference, August 2016 had 9,813 sales; August 2015 had 7,998; and August 2014 had 7,568 sales. Last year, August was well below the previous few years, so an impressive-seeming increase this year must be seen in the right light.

The average sale price was up 4.7% to $765,270. Again, a bit below the previous month but typical for the time of year. (Also, the mix of types of home matters more when the volume is relatively low.) There were 12,166 new listings, a 6% increase, and the total number of available listings was up 8.8%, to 17,864.

Condo sales volume slipped 5.6% in the 416 last month, but the average sale price actually increase 8.3%, possibly reflecting some extra tightness in that segment. With some luck, September listings will ease that pressure – but, still, condos remain a good buy for downtowners and investors.

Looking ahead to the rest of September, it’s reasonable to expect more new listings and a decent pace of sales. The average sale price in September 2017 was $775,546, which represented a significant bump from $730,969 the month prior. Again, that’s typical of the seasonal nature of the real estate market – things pick up quickly in September. I think that this month will be our first really good measure of what the market has been doing since the price spike/correction of 2017. My bet is that we’ll see strong price appreciation.

By the way, the Bank of Canada left their prime rate unchanged this week, so we might actually have a month or two without any outside interference in the market. That would be nice, as it would allow things to unfold naturally. 😉