March 2020 Market Review

The whole COVID-19 thing really hit the fan in about mid-March. It’s pretty amazing how clearly that shows up in the March sales stats put out by TRREB. In fact, the official report (the source of the data I reference in these reviews) makes the point of dividing the month into pre-and-post ‘lockdown’ . (Sunday the 15th is the ‘official’ start of the second half.)

In the first half, the market was super busy. There were 4,643 sales reported in the pre-COVID-19 period, representing a 49% increase compared to the first 14 days of March 2019. That’s probably a good indicator of the direction that the Toronto real estate market was going before COVID-19. The second half of the month was a different story: 3,369 sales were reported, down 15.9% compared to the same period in March 2019. The shift in activity was sharp.

At the same time, the MLS® Home Price Index Composite Benchmark price was up by 11.1% year-over-year in March, 2020. The average selling price for March 2020 as a whole was $902,680, up 14.5% compared to March, 2019. The average selling price for sales reported between March 15 and March 31, was $862,563 – down from the first half of March 2020, but still up by 10.5% compared to the same period last year. So, the market has been different, but prices stayed fairly strong through March.

For March as a whole, new listings were up by 3% year-over-year to 14,424. However, similar to sales, new listings dropped on a year-over-year basis during the second half of the month (beginning March 15) by 18.4%.

Things started to get even more complicated in the first half of April. TRREB stopped regularly reporting mid-month stats a year or two ago, because they show too much volatility to be very useful. However, due to the circumstances, TRREB decided to publish the numbers for the first half of this month. From the report:

“• 1,654 home sales through TRREB’s MLS® System during the first 17 days of April – down 69% compared to the same period in 2019. Year-over-year sales declines, in percentage terms, were greatest for the detached and condominium apartment market segments. In the detached segment, the higher end of the market was particularly impacted in the City of Toronto. The condominium apartment segment has traditionally attracted a high share of first-time buyers, who in times of uncertainty can put their decision to purchase on hold.

• The number of new listings was down on a year-over-year basis by a similar annual rate, declining by 63.7% to 3,843. The fact that new listings trended in a similar fashion to sales during the first half of April means that market conditions remained tight enough to provide support for the average selling price in line with 2019 levels.

• The average selling price for sales reported during the first 17 days of April 2020 was $819,665 – down by 1.5 per cent compared to the same period in 2019. Uncertainty about market conditions due to COVID-19 certainly played a role in moderating the pace of year-over-year price growth during the first half of April. The changing composition of home sales also played a role. In the City of Toronto, for example, the number of homes sold for more than two-million dollars declined more than overall sales. This also had an impact on the average selling prices. It should also be noted that selling prices have also followed listing prices, with average listing prices down by a similar amount. Average selling prices have not been noticeably lower than listing prices compared to last year.”

Okay: sales are down, listings are down, and prices are slightly down – so now what? Well, it depends – are we nearing the end of the ‘lockdown’? It’s starting to seem that way. I had clients look at a house in East York the other day. That seller got at least 17 offers last night! Clearly, there are loads of buyers out there, and not nearly enough listings. I think (and hope!) that things are starting to wake up. This last month/six weeks has been weird and difficult, but I’m willing to bet that the Toronto real estate market is about to start picking up steam again. Easing ‘lockdown’ is the first step. After that, listings will be key to what the market does next….