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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 2018 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. 😉

June 2018 Market Review

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

For most of 2018 so far, it has appeared that the Toronto real estate market has been ‘down’. All along, I’ve been saying that it only looks that way because of the crazy price spike that occurred in the first few months of 2017, and that once this year’s data started to compare to what happened after the spike was over, we would get a better sense of what’s actually happening. (I have also done some longer-term comparisons, and looked at the month-to-month data over the last half-year or so.) Well, it appears that we are getting there!

The June 2018 stats are out, and the average price has finally shown a year-over-year increase. At $807,871, it’s only about a 2% increase over last June’s $791,929, but it’s notable for actually being an increase. The sales volume was also up to 8,082, about 2.4% above the 7,893 reported last June. In fact, the only metric that was down last month was new listings; there were only 15,922 last month, down 18.6% from last June’s 19,561. By the end of the month there were 20,844 active listings on the TorontoMLS, up 5.9% from 19,680 last year. That’s a decent number that should offer reasonable selection for buyers.

Something else that caught my eye is that the average sale price for the last few months has been quite stable. In March it was $784,558, then in April it jumped to $804,584, and was $805,320 in May. The June number is almost the same (see above), making for three months of flat pricing. Naturally, it could have something to do with the product mix, and declining new listings could also play a factor. Still, it’s a bit unusual: imagine that – a stable real estate market in Toronto!

Condos showed a 6% decline in sales volume, but a 9.5% jump in average price. With more luxury condos being built in Toronto, it could just be that the size and value of the typical condo hitting the market is greater, but it could also reflect continuing tightening in that segment. Either way, I think we can safely say that the Toronto condo market is not ‘over built’ or in any kind of trouble.

The summer months are typically a bit slower than spring and fall, so we naturally see a slight dip in sales and prices in July and August – and recent heat wave will probably contribute to that. But, overall I believe that we are past the messiest numbers, and the data over the next few months will show strong increases over last year. Watch for it – and remember that you read it here first! 😉

 

May 2018 Market Review

June 15th, 2018 Posted by Blog, Market Review No Comment yet

The Toronto Real Estate Board reported 7,834 sales in May 2018, 22.2% fewer than May 2017. There were 19,022 new listings posted to the Board, 26.2% fewer than the same month last year. Despite fewer new listings, the total number of available listings increased by 13.2%, to 20,919. Last year there were 18,477 on the market in May, and in May 2016 it was just 12,931. As I’ve pointed out before, in the busy spring and fall markets we used to regularly have over 20,000 listings, but that number fell significantly in recent years. We are at what I’d consider to be a decent level of available homes for sale, and that should not be misinterpretted as anything close to over-supply. If anything, it is closer to balanced (rather than clearly favouring buyers or sellers).

On the price side, the average sale price was $805,320, down 6.6% from last May. By May 2017, the big run-up in prices had peaked, and was on its way back down. I’ve been saying that last year’s anomalous price spike was making it hard to figure out what’s happening this year, and that when we got to the middle of this year and started comparing to the post-spike months of 2017 we’d have a better picture, and I think we are getting there.

That price spike was fairly short-lived – it was a truly wild ride. In December, 2016 the average sale price was $730,472. By April, 2017, it had leapt up to $920,791, a roughly 26% increase – in just four months! Over the next few months it declined, hitting $732,292 in August, erasing the spike almost completely. Since then, the market has been more or less increasing (with a typical December lull), and is currently up about 10% since last August. That’s a solid rate of increase, and would indicate a fairly strong market.

Condo sales in the 416 were down 13.2%, but the average sale price was up by 6.5%, showing that the condo market is chugging along.

Over the next couple of months, the numbers will start to reflect the true state of the Toronto real estate market. Given that the May average price is already above the June 2017 average price (which was $793,915), I think we’ll see our first year-over-year increase when this month’s numbers are reported in a few weeks. Who wants to bet that the headlines are going to be all about Toronto’s “booming” real estate market! 😉

 

April 2018 Market Review

May 9th, 2018 Posted by Blog, Market Review No Comment yet

TREB reported 7,792 sales last month, a drop in volume of 32.1% from April 2017. The average sale price was down 12.4%, but keep in mind that at this time last year the market was still showing the effects of that massive price spike. April 2017 had shot up 33.2% over April 2016, which was wild and unsustainable. This year, the April average price was $804,584. To help us keep some perspective on things, I’ve been looking back at 2016, and seeing how this year compares. The average sale price in April 2016 was $688,011, so we’re up 16.9% since then. Even averaging over two years, that gives us almost 8.5% annual increases over that time, which is pretty darned good.

Another point to keep in mind that the mix of types of real estate sold influences the average price. TREB points out that sales over $2 million accounted for about 10% of sales in April 2017, but just 5.5% in April 2018. Obviously, more high-end sales in 2017 helped skew up the average sale price, and that’s not happening so far this year. That’s why TREB’s MLS® HPI Composite Benchmark (which weights sales across the board) was down by just 5.2%.

Condo sales volume also declined last month, down 26.4% from the same time last year. Once again, though, condo prices in the 416 increased, this time by a rather moderate – and sustainable – 3.8%.

Back to the average price: I usually don’t bother tracking month-to-month price changes, because seasonal influences – even something like a big storm, or a long weekend – can have short-term impacts. However, because we are trying to see through/around the big price spike in early 2017, it’s worth noting that the April 2018 average price was up 2.5% over March. Looking at 2018 to this point, the average price is up 9.5% since December. That’s actually fairly significant, and a sign that the Toronto real estate market is in good shape.

There were 16,273 new listings posted last month, and at the end of the month there were 18,206 available. That’s up 40.8% over last year, and it means that there’s more selection for buyers. Still, it’s not as many as April 2013, when there were 20,866 listings – and in April 2008 there were 24,530! Ah, the good ol’ days…. 😉

Over-all, the spring market seems to be under way. It’s a great time to both buy (because there’s some options out there now) and sell (because there are lots of buyers), so if you are in the market, feel free to call me!

February 2018 Market Review

March 13th, 2018 Posted by Blog, Market Review No Comment yet

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. 🙂

 

December 2017/Year End Market Review

January 9th, 2018 Posted by Blog, Market Review No Comment yet

The Toronto real estate market survived a roller-coaster-like year in 2017. The first quarter (Q1) saw wicked price increases, followed by a hard rebound in prices in Q2, which in turn was followed by a period of relative calm in Q3, then a surge in sales activity in Q4. When the dust settled, the December year-over-year average sale price was up just about 0.7%, but the average price for the year 2017 ended up 12.7% higher than 2016, at $822,681.

Most of that annual gain happened in Q1. That’s when super-tight supply squeezed buyers into making very aggressive bids. Then, the Ontario government gave the market a kick in the teeth with their ‘Fair’ Housing Plan (an Orwellian use of language, as seems to be the style these days…), which scared buyers to the sidelines with speculative talk about ‘foreign buyers’ – the Boogie Man in the Liberals’ pitch. As the TREB report says: “Research from TREB, the provincial government and Statistics Canada showed that foreign home buying was not a major driver of sales in the GTA.” Still, they needed a reason to Do Something, and foreign buyers fit the bill. When buyers retreated, prices plopped back down to where they started the year, and we were into a bit more of a balanced market.

That balance started to shift back towards the sellers’ favour in December. I think that the year-end surge was fuelled by two things: 1) buyers realised that foreign buyers were not behind the steady rise in GTA prices, and the new tax wouldn’t really change anything long-term (after a period of adjustment); and 2) more government intervention, this time in the form of new federal ‘stress test’ rules for buyers in 2018, meant that many folks wanted to get their purchase locked in before those new rules kicked in.

Basically, the wild volatility throughout the year was largely due to government intervention in the market. As mentioned, we’ll see more of that this year, but hopefully less, and with less of a destabilising effect.

TREB also noted that in the second half of 2017, the buyer market shifted away from the most expensive housing type – fully detached homes – to semis, towns and condos. Clearly, the market has the capacity to offer buyers options, which naturally mitigates the need for government intervention, but whaddya do…? Sales activity in the detached segment was down 13.4%, and the average sale price was down 2.1%, to $1,250,235. At the other end of the spectrum, while condo sales volume in the 416 dipped 8.8% in December, the average price was up 14.1%, to $532,700.

So, what does 2018 have in store for us? Life goes on, in spite of policy changes, and lots of folks plan to move for various reasons, so I figure there will be lots of sales this year. The 2017 end-of-year available listing volume sat at 12,926, way up from just 4,746 at the end of 2016. If that can be maintained we might be able to settle in to a ‘liquid’ marketplace that offers buyers choice. There’s no structural shortage of buyers – they just get shooed away by governments from time to time – so more supply will allow more buyers to succeed. With some luck, price appreciation will be lower, which is more sustainable long-term.

What are your plans this year? Feel free to get in touch with me to talk about that! 😉

Market Review September 2017

October 13th, 2017 Posted by Blog, Market Review No Comment yet

The most obvious aspect of the September market was the drop in sales volume. Transactions were down 35.1%, from 9,830 last year to just 6,379 this year. At the same time, the number of active listings surged from 11,255 to 19,021, an increase of 69%. This is, broadly speaking, good for the market. For perspective, there were 21,571 active listings in September ’07, and that was down from 26,363 the previous year; the current number is below historic levels. However, it does make for some stark-looking numbers. Still, the average price did manage to eek up 2.6% year-over-year. That means that, despite the wild roller coaster ride that the market experienced in the first half of the year, we are still in positive territory over-all.

The average sale price for the month was $775,546, well down from the fever-pitched levels that we saw in the first quarter of 2017. I don’t usually track same-year stats, but with the way things have gone in 2017, I think it’s warranted. Average price hit a peak of $920,791 in April, and had trended downwards every month since then, quickly giving up the rapid gains seen in the first few months. The August average was $732,292, so September at least showed its usual strength relative to the summer months.

When discussing the condo market, I always make a point of focusing on sales in the 416 area code (separate from sales in the 905). This month, it’s interesting to note the difference in prices for detached homes in the 416. Last month, the average sale price in Toronto was $1,355,234, up significantly from the $1,191,052 average we saw in August. That indicates a strong market, despite the news. In the 905, the August average was $906,592 and rose just slightly to $912,921 in September. Clearly, the decline in the overall average sale price isn’t because of lower prices for detached homes. As TREB noted in its report, “the MLS® Home Price Index (HPI) composite benchmark was up by 12.2 per cent on a year-over-year basis”, which indicates that the ‘decline’ in prices is more due to the mix of home types sold, which is a healthy reaction by the marketplace.

The condo segment was also interesting. Sales in the 416 volume was down 23.2%, but the average sale price was up 24%, to $554,069. Condos seem to have been acting as a ‘relief valve’ for people finding themselves priced out of low-rise dwellings, and the price gap is narrowing in reaction to that….

So, what does it all mean? Who knows! The real estate market has been under constant pressure from the government for a few years now (several rounds of tightened mortgage rules, with more to come; new taxes; enhanced rent controls, etc.) so it’s hard to tease out what’s actually going on. The ‘fundamentals’ are still in favour of a strong, growing market: decent economy, some job creation, historically low interest rates and a growing population. But, with so much meddling by governments, and the natural confusion that causes, the behaviour of the market is not a reflection of fundamentals. It’s probably safe to say that the fundamentals will eventually show through – meaning a resumption of solid price increases – but we may have to wait for the meddling to recede before we see that…. In the meantime, the market is surviving!  😉