Posts tagged " Market Review "

January-February 2020 Market Review

March 11th, 2020 Posted by Blog No Comment yet

To start the year, I’m combining January and February into one review. ūüėČ Plus, I’ll make some comments about interest rates near the end.

January 2020 basically picked up where 2019 left off – busy! The pace of sales increased 15.4% (4,581 this January over 3,968 last January); at the same time, the number of new listings declined (again) to 7,836, from 9,456 last January. By the end of the month, there were just 7,772 listings available, down 35% from 11,962 last year! This now-familiar dynamic between the number of homes available and the number of sales caused the usual upwards price pressure: the average sale price hit $839,363, up 12.3% over the average for the same month last year (which was $747,175).

By the way, TRREB is now reporting seasonally adjusted, month-over-month changes in sales activity. I’m not sure if that will help with understanding the market – except to help identify when the spring and fall markets start and stop – but for the record, January sales were up 4.8% over December….

Condo sales in the 416 remain strong. Sales were up 9.7% and the average price was up 15%.

TRREB also noted that “the MLS¬ģ HPI Composite Benchmark price was up by 8.7 per cent compared to January 2019 ‚Äď the highest annual rate of growth for the Benchmark since October 2017”. Detached houses and condos were the biggest contributors to the change in the weighted average.

February 2020 was also a big month. There were 7,256 residential sales in February, up a whopping 45% over February of 2019 – but, it’s important to note that February 2019 saw a 10-year record low for sales (just 4,982). The big sales increase was somewhat mitigated by 10,613 new listings, an increase of 7.9% over the same month last year. However, by the end of the month there were just 8,816 listings available, down 33.6% from last year. The resulting price pressure drove up the average sale price to $910,290, +16.7% over the February 2019 average of $779,791.

TRREB reported that the sales activity in February was up by 14.8% over January. This shows some momentum over the last few months, but that’s to be expected at this time of year. We’ll have to see how this month-to-month data develops as the year progresses before I decide how I feel about this new metric; I’m not sure how helpful it will be. For example, it’s reasonable to expect that the COVID-19 panic will slow down sales this month – but I’d bet anything that the market will surge back to balance when the fears blow over. So, the month-to-month data could end up being misleading to some….

Condos had another good month. Sales activity increased by 26.2% and the average price increased by 18%, to $722,675.

TRREB’s MLS¬ģ Home Price Index Composite Benchmark was up 10.2%. Townhouses had the smallest increase in price (10.5% – not exactly a ‘small increase’!) and condos had the largest increase in price.

Interest rates are dropping this week, partly due to the COVID-19 scare. (Rates are more directly related to bond prices, but the decline in bond prices may also be related to the COVID-19 scare….) If you got a mortgage last year or the year before, it may be worth speaking to your mortgage broker or bank and ask about the possibility of breaking your mortgage for a new one at the current rates. BEWARE OF THE PENALTIES! Don’t assume that today’s lower rates will make up for the cost of penalties – it depends upon who lent you the money, and what terms are in the mortgage. All I’m saying is that it’s something to consider/talk about. Contact me if you’d like to speak to one of my partners in the mortgage industry.

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 Рin 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. ūüėČ

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…. ūüėČ

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. ūüôā

 

June 2016 Market Review

July 7th, 2016 Posted by Market Review No Comment yet

June was a typically busy month in the Toronto real estate market. TREB’s Market Watch reported¬†12,794 sales for the month, up 7.5% from the¬†11,905 sales reported last¬†June. I could copy and paste this from my last couple of market reviews: once again, new listings were down. There were only¬†16,980 last month, down 3.8% from the¬†17,659 new listings posted in June, 2015. The total number of active listings was down a whopping 31.4%, from 17,972 to just¬†12,327. Again, that’s a major source of frustration (and escalating prices) in the Toronto market: not enough listings!

The average sale price (for all types, not just the much-reported detached house) was $746,546,¬†up 16.8% over last June’s $639,309. That’s a pretty steep hike, but not shocking given the lack of inventory.

The condo segment had a great month. Sales were up 15%, and prices edged up 6.9%, showing some strength, but again keeping condos as a great option for would-be house buyers who want to get into the market before they fall too far behind the price increases. Think about it: the sooner you buy something, the sooner you start building equity!

By the way,¬†short supply of new listings isn’t the only reason prices continue to rise. There are other factors that affect housing prices in Toronto. Everybody knows that low interest rates (i.e. ‘cheap money’) are helping buyers; that’s a big deal, certainly. Our fantastic city’s rising population contributes a constant level of demand, too. Rarely reported is the non-stop¬†improvements we see going into properties all across the city. Renovations and additions add value, and one doesn’t have to look far to see them happening. That house that just sold for way more than it did last year has been gutted and modernized. It makes sense that it would sell for much more, doesn’t it’?

July and August are usually a slower period – the ‘summer market’. If you are a buyer, keep your eyes open, as we may see some opportunities while other buyers are at the beach/patio/cottage! ūüėČ

November 2015 Market Review

December 11th, 2015 Posted by Market Review No Comment yet

TREB reported 7,385 sales through the Toronto MLS in November, 14% more sales than November 2014, and setting another monthly sales record. The average sale price (across all housing types) climbed to¬†$632,685, up 9.6% year-over-year. TREB’s HPI, which attempts to smooth¬†out that average by weighting for size and type of property, was up 10.3%.

New listings surged by 10.4%, to¬†9,609 but, once again, the total number of active listings decreased. November inventory was just¬†13,454, down 8.4% from November 2014’s 14,717. I often compare the tight supply that confounds the current market to the relatively robust numbers pre-recession. For example, in November 2005 inventory was¬†20,273 (average sale price $341,177); in November 2006 it was¬†22,981 (average sale price¬†$355,727). There’s more than just tight supply behind today’s numbers – population growth, investment¬†demand, inflation and economic growth – but the supply issue exacerbates existing demand and contributes to rising prices. Unfortunately, I don’t see a resolution to that challenge any time soon.

The Toronto condo market had another very strong month. The number of sales in the 416 increased by 13.3%, while average price increased 5.4%, to $415,316.

As I said last month (and several times over the years), it should come as no surprise to anybody that new records are set quite frequently. The economy is strong (job creation in Toronto is well above the national average) and the population of Toronto continues to grow, two factors that will obviously contribute to demand for housing. Despite relatively low supply, demand has driven the pace of sales to an annual record. With December yet to complete, TREB has reported¬†96,401 sales through November – already the new record. Once¬†December gets added we’ll most likely see 100,000 sales reported for the first time.

The market slows through December, as so many folks have busy holiday seasons. However, the market never stops. Last year, TREB reported¬†4,446 sales in December, just more than half of¬†what we saw last month. That’s still about 1000 per week – nothing to sneeze at! So, if you are in the market, by all means prioritize your time for family and friends, but keep half an eye on the real estate market. You wouldn’t want to miss anything! ūüėČ

June 2015 Market Review

July 7th, 2015 Posted by Market Review No Comment yet

June was another record month in the Toronto real estate market. Sales volume was up 18.4% to 11,992 transactions (over 10,132 in June, 2014), setting a new record for the month of June. Over the same period, new listings increased by 6.7%, to 17,746, but total active listings shrank by 13.1% to 17,972  (down from 20,686 last June) due to the rapid pace of sales. This familiar combination resulted in another increase in the average sale price. The June average (for all types) of $639,184 was up 12.3% year-over-year.

The MLS¬ģ Home Price Index (HPI) Composite Benchmark, which¬†does a more detailed comparison (e.g. adjusting for number of bedrooms, finished vs. unfinished basement, etc.) was up a slightly more moderate 8.9% (same as May).

The condo market in the 416 saw sales increase by 21.3%, and average price increase by 7%, to $418,599. That market continues to be a great option for first-time buyers, investors, downsizers, and anybody who wants to live the downtown lifestyle.

So, as expected, June was a busy month, possibly due in part to a slow start to the spring real estate season. July is shaping up to be busier than usual, too – which sometimes happens after a late spring market. Buyers, stay active and you’ll find what you are looking for! Sellers, you stand to benefit from an active market – so no need to hold off ’til fall.

May 2015 Market Review

June 8th, 2015 Posted by Market Review No Comment yet

May was another busy month in the Toronto real estate market. Sales volume was up 6.3% to 11,706 transactions (over 11,013 in May, 2014). At the same time, new listings slipped by 0.8%, and total active listings shrank by 10.1% to 18,585, down from 20,679 last May. This familiar combination resulted in another increase in the average sale price. The May average (for all types) of $649,599 was up 11% year-over-year.

The MLS¬ģ Home Price Index (HPI) Composite Benchmark, which¬†does a more detailed comparison (e.g. adjusting for number of bedrooms, finished vs. unfinished basement, etc.) was up a slightly more moderate 8.9%.

Of on-going interest to me (if only because it serves to prove the doom-sayers wrong) the condo market in the 416 saw sales increase by 12.9%, and average price increase by 5.5%, to $422,947. That market continues to appeal to buyers, who by now realize that it can be a competitive segment, too.

As has been the case for several years now, the main issue is that lack of supply. There are plenty of buyers. The economy is stable, and likely improving: it cranked out about 59,000 jobs in May, keeping the unemployment rate at 6.8%. (For perspective, the unemployment rate in May, 1996 when I graduated from U of T was 9.7%! Things today look downright cheery by comparison.)¬†Also, with rates low and staying that way for some time to come – likely a couple of years – purchasing power¬†among buyers will remain strong. That will continue to drive sales – meaning that a buy now is better than a buy in 6-12 months….

March 2015 Market Review

April 21st, 2015 Posted by Market Review No Comment yet

As usual, real estate is much in the news these days. With the oil market correction, the media (and a few others) jumped all over the idea that the real estate market would – obviously! – experience a crash of some sort. The only question seemed to be how big.

Well, with oil seemingly stabilized in the $50-$60 range, the worst of the ‘oil shock’ could be behind us (although I’m not claiming to have a crystal ball…). And, with the exception of a couple of markets in Albert (which are¬†not Toronto), real estate has once again defied the doom-sayers.

Toronto, as usual, showed its strength. According to TREB’s stats for March, 2015, sales volume (number of sales) was up 11%, to¬†8,940 transactions. New listings edged up 5.5%, but they remain short of demand. The result was a 10% year-over-year increase in the average sale price, to $613,933.

Since averages can sometimes give a bit of a muddled picture, TREB also breaks down sales by type and weights that average. For example, the average price of a detached house was up 15.9%; that has a strong lifting effect on the over-all average for the Board. Balanced against the other housing types, the Index showed a 7.9% increase across the Board (7.8% in the 416).

Still, a roughly 8% increase over last year is hard to keep up with. If you already own real estate, it’s great, but for first-timers it can be hard. That could be why we are starting to see more interest in areas not famous for their hot real estate prices. We know that Leslieville, Riverdale, Swansea and High Park are always going to draw top dollar. But these days we’re seeing hot competition in neighbourhoods like Birch Cliff Heights and Ionview (in Scarborough). There are still areas around town where one can get a great house at a great price.

There are countless people who want to live downtown and are willing to live in small spaces – and Toronto needs them to keep the core vibrant. I don’t want to take anything away from that, and I hope that this¬†apparent shift happening among condo developers, who are starting to offer slightly larger units, is real. But there are loads of other folks who want a low-rise home. You folks shouldn’t¬†be scared away by the average price increases, and don’t be intimidated by the nay-sayers. Real estate markets absolutely¬†do go through corrections from time to time, but there’s no reason to¬†think that Toronto is about to go down the tubes. This is too fantastic a city for that! ūüėČ The relentless strength of the Toronto real estate market is a testament to the value offered here. Expect prices to continue trending upwards in coming years.

September 2014 Market Review

October 21st, 2014 Posted by Market Review No Comment yet

September 2014 saw 8,051 transactions reported in the Toronto Real Estate Board, an increase in sales volume of 11% year-over-year. New listings were up 5.8% (to 15,692), but total available listings were down 5.1% (from 20,194 to 19,165), so there¬†wasn’t enough supply to keep pace with the buyer side of the market. The high pace of activity drove prices up on average by 7.7% over September 2013, to¬†$573,676.

In the condo segment, sales volume in the 416 was up 15.6%, with prices up 9.2%, showing that the condo market continues to be solid.

Basically, it has been a typical fall market: busy. There was a bit of a lull around Thanksgiving, but things seem to have picked right back up. We should see continued activity through at least mid-November, before the market calms down for Christmas/New Years, etc.

Year-to-date (i.e. January to September), total market activity has increased¬†6.9%,¬†to 73,465 sales for the year.¬†The average selling price for the year is¬†$563,813, an increase of 8.5% compared to the first three quarters¬†of 2013. There’s nothing indicating a slow-down in the fourth quarter, so I expect that we’ll see record numbers in both categories by the time 2014 comes to a close. All in all, the Toronto market is healthy and strong. It’s a great time to buy and/or sell. ūüôā