March, 2021 Market Review
By now we’ve all been hearing for a couple of months about how ‘hot’ the Toronto real estate market is – and it is. Some of that has to do with COVID – i.e. we’re comparing this busy March to post-lockdown March 2020 – but not all of it. I’m going to show how 2021 compares to the last several years.
Here’s what sales volume looked like over the last few Marches:
March 2015 – 8,887 (+11%)
March 2016 – 10,260 (+16.2%)
March 2017 – 11,954 (+17.7%)
March 2018 – 7,188 (-39.5%)
March 2019 – 7,187 (~0.0%)
March 2020 – 8,012 (+12.3%)
March 2021 – 15,652 (+97.0%)
Here’s what the average sale price looked like over those years:
March 2015 – $613,933 (+10%)
March 2016 – $688,181 (+12.1%)
March 2017 – $916,567 (+33.2%)
March 2018 – $784,558 (-14.3%)
March 2019 – $788,335 (+0.5%)
March 2020 – $902,680 (+14.5%)
March 2021 – $1,097,565 (+21.6%)
Clearly, price follows activity – when sales volume goes up (more activity), prices go up. When sales volume goes down (less activity – rare in Toronto), the average sale price moderates, and once (2018) went down – but only briefly, and not by much. Basically, it all boils down to supply and demand – the story of the Toronto real estate market. This is a great city, it usually grows in population and wealth, so the real estate market remains resilient.
So, even taking into account that March 2020 may have been affected by the onset of COVID, it was still a relatively busy March. This year, with almost double the activity, stands out compared to all the previous six years. Note that spring 2017 was a busy time – more sales than previous and following years – and 2021 is dramatically more busy, and prices have surged even higher.
Also, keep in mind that, if you are a home-owner, you can rush to catch these hot markets (e.g. if you have a plan to downsize, or leave the city entirely); and, if you are a buyer, you can usually choose to delay jumping in. (Obviously, that’s not true for all buyers.) Such natural reactions can help to moderate the market: more listings (i.e. increased supply) can ease the price pressure by giving buyers more choices; while fewer buyers – even temporarily – can ease demand, which we usually see happen at the end of spring and fall markets. Nonetheless, the Toronto real estate market usually keeps on keeping on, so there’s really no bad time to buy or to sell (again, there are obvious exceptions to that generalization).
The other thing to note is the condo segment. After a lull October-December, 2020 (truly related to COVID, I believe), the condo market has caught fire. After trending downwards for a while (October 2020, $668,161; November, $640,208; December, $625,828; January 2021, $624,886), prices surged in February to $676,837 and hit $707,835 in March. So, I think it’s fair to say that the brief condo-buying opportunity is in the past.
So, now it’s time to take a deep breath – the spring market is really just getting going! 😉 Lots of great new listings are hitting the market daily, interest rates remain incredibly low, and the general economy should survive this latest ‘lockdown’. Real estate is going to keep rolling.