Toronto’s Housing Market – Down But Not Out!
July numbers are out, and although Toronto’s Real Estate Market keeps taking solid punches straight to the face, it’s still hanging in there. With June and July showing significant declines in units sold, the average price continues to climb for year over year numbers. News headlines have been screaming about the 40.4% drop for July 2017 vs July 2016. You’ll also hear how July’s average price is less than June’s average price. Newsflash, that’s a traditional drop. It is the same EVERY year. Even in our best year ever of 2016, the average price dipped from June to July. This makes for a great cover story but, as I’ve mentioned before, it’s very difficult to judge a book by it’s cover. Take a look into the first seven chapters of this book rather than just the “Coles’ Notes” version based on a few pages.
Let’s look at the statistics in a bit more detail. The chart below is for 2017 sales. We have had a total of 60,620 homes sold in the first 7 months of the year. Last year at this time we had 69,942 homes sold in what was a record shattering year for home sales on the Toronto Real Estate Board. Comparatively on a year to date basis, we are down 13.3% in units sold. Average price is a different animal altogether. Average price for 2016 was $729,827. For 2017, we sit at $857,823, an increase of 17.5%. Ironically, the increase from 2015 to 2016 was also in the same range at 17.3%. Traditionally, we should see increases of 6-8%, so the 2017 and 2017 numbers are skewed by the ultra hot market, last year and from January to March of this year, where we saw homes sell in multiple offers for ridiculous amounts. Important fact to remember is that those selling prices did not change the market value for your area. Those selling prices were a simple reflection of a supply and demand imbalance and was more a statement of what people were willing to pay up to in order to get into a home in a limited supply marketplace. Look for the average price to level off in the next five months and settle in close to a slightly higher than normal mark for appreciation.
Getting back to 2016 numbers, last year was a phenomenal year. With 113,045 homes sold, Toronto was up 11.7% over the previous record setting year of 2015. We saw an average of 9,420 homes sold per month in 2016. How crazy is that? The previous high in 2015 saw us average 8,434 homes sold per month. Now, as bad as all the cover stories are making 2016 look, did you know we are averaging 8,660 homes sold per month year to date? We are down 8% for average units sold per month from last year, but we are up up 2.7% over 2015.
Looking at Historic stats, since 2005 we have watched units sold fluctuate. 2006, 2008, 2010, and 2012 all saw declines in units sold from the previous year. Looking at the average price, it continues to climb though. So for all the people waiting in the wings to “buy low”, prices aren’t going to drop. Your advantage is buying when there is a lot of inventory on the market. An increase in supply means you won’t be competing and driving prices up in bidding wars. Your window of opportunity is right now. Over the last week, we have seen people that were waiting scooping up properties. Inventory will start to come down over the next four weeks as buyers scramble to get into a home before the end of summer. Once that happens, you will be competing again.
Getting back to the number of sales per month in 2017 year to date, extrapolate that 8,660/month number and over 12 months we will sell 103,920 homes for 2017. This will make 2017 the second best year in the history of the Toronto Real Estate Board. Considering this year has been punched in the face by the government’s absolutely ridiculous 16 point plan that doesn’t even make sense to them now, banks tightening qualifying ratios, appraisers trying to be superheroes, and the first interest rate hike in 7 years by the Bank of Canada, that’s not too shabby is it? This just goes to show, the Toronto Housing Market may be down, but it’s surely not out. You can’t judge a book by it’s cover. 😉