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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….

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.

 

 

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…. 😉

 

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! 😉

 

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!

March 2018 Market Review

April 4th, 2018 Posted by Blog, Market Commentary No Comment yet

Well, the TREB stats are out for March, and so are the breathless headlines! I was going to comment on a few of them, but the thought gave me a headache. 😉

While sales volume fell significantly year-over-year (down about 40%), one has to remember that at this time last year the market was still in the throes of utter madness. Very low supply had fuelled aggressive bidding by buyers, which caused a feeding frenzy of sorts, and that rapid price spike that I have referenced before. Compared to that period, the current market is a picture of serenity! Prices pulled back last year in/around April-May-June. Basically, comparing March of 2018 to March of 2017 is a bit pointless, because last year was an anomaly. I think that we’ll get a better sense of the true state of things when we see the April and May reports.

Nonetheless, the fact is that the average sale price was lower in March than it was last March, about -14.3%. Sales volume was down across all housing types, but the average price for a condo in the 416 was actually up 7.1%, again indicating that buyers have adjusted to high house prices by looking at the condo option. The average price for a detached house is now about $1,293,903, down from $1,561,780 at the same time last year. Keep in mind, though, that the price spike last year was +32.8% over March, 2016! That was obviously unsustainable, and it’s a good thing for the over-all market that those conditions only lasted a few months. The average sale price for a detached home in 2016 was $1,174,358; this year’s average is up about 10.2% since then, which I think is quite reasonable.

Keeping with the theme of looking back at 2016 for some perspective, overall, the average sale price in March 2018 is up 14% over March 2016, which tells me that we are in good shape.

The number of new listings dropped from 16,978 to 14,866, a decline of 12.4%. That might be because sellers were afraid of diminished returns, or it could just be a coincidence.  Even so, the number of active listings basically doubled, from 7,865 to 15,971. Again, that’s a good thing. There were 12,132 listings in March of 2016, which was down from 15,295 in 2015, so we are basically back to 2015 levels. Enough supply means that buyers have a better chance to buy what they want/need in the area where they want to be, and that’s a sign of a healthy real estate market.

Now that March Break and Easter are behind us, and the market has had time to absorb the new federal mortgage ‘stress test’ rules and the provincial housing regulations, I’m hoping that we get going with the spring market! If you plan to buy or sell any time soon, feel free to get in touch.

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. 🙂

 

January 2018 Market Review

February 14th, 2018 Posted by Blog No Comment yet

You may have heard that ‘sales were down’ in January, with the implication that that’s a bad thing. As anyone actively involved in the Toronto real estate market knows, the market is not ‘down’ at all. In fact, it’s crazy busy out there.

The first thing to note is that January 2017 set a record for sales activity with 5,155 sales. So, anything short of a new record would be down, right? I have said before that we don’t have to break records every month to have a great market, and this is another such example; 4,019 sales is decent. For comparison, January 2013 saw 4,375 sales – way below last year, and not much above this year. I’d say that January 2018 looks fine.

The next thing is that January is a relatively slow month, compared to May or October, so fluctuations can be exaggerated. Having 22% fewer sales sounds dramatic, but it’s only about a thousand sales – easily made up at any point throughout the rest of the year.

The good news that I see in the January 2018 stats is the big increase in supply. At the same time last year there were only 5,034 listings on the TorontoMLS. This year we had 11,894, which gave buyers more choice. Looking again at 2013, there were 14,231 active listings in January of that year, so supply could easily go up and still be below past levels. If this year’s increased supply can be maintained – and improved upon – throughout the year we could see a more moderate market, which would be a nice change….

Speaking of moderation, the average sale price dipped by about 4.1%, to $736,783. However, TREB’s weighted average was UP 5.2%, reflecting the number of sales of condos compared to houses i.e. more condos (which are cheaper than houses) sold. Moderation in the price of single family detached (the most expensive type, and the only one that saw a price decline), combined with price increases in other housing types, shows that the market has naturally adapted to high prices for detached houses. I doubt that government intervention had anything to do with that…. 😉

The condo market is nuts these days. Not only did my own condo listing get swamped (over 130 showings in a week, and 11 offers on ‘offer night’), but showing condos to other clients is a gong show. Getting appointments is sometimes tricky, and it seems there’s always at least one other agent poking around the same unit, meaning we sometimes have to wait to get in to see a place. The activity is reflected in the average sale price going up 15.1% last month, despite fewer sales. The condo market remains an attractive segment.

This week precedes a long weekend (Family Day), so we probably won’t see much action, but I expect the market to keep chugging along next week and for the rest of the spring market. If you want/need to buy or sell, feel free to get in touch. 🙂