2019 Toronto & GTA Residential Real Estate: A New Decade Dawns

By: Andrew Gibson for theBB.group

2019 Toronto & GTA Residential Real Estate: A New Decade Dawns


Toronto, Ontario, January 7, 2020 - Toronto and Greater Toronto Area Realtors® this morning released the monthly MarketWatch statistical publication for the final month of the decade, Chart - 2019-12 Toronto & GTA Home Sales & Average Price by Major Home TypeDecember, 2019 confirming - to nobody’s surprise - robust increases in the MLS® sales volume and selling price figures, even with home listing inventory levels getting closer and closer to their historic lows.

The report once again shows minus signs only in front of the figures relating to inventory & demand, namely New Listings, [Total] Active Listings, and Days on Market. Given that we’ve just closed the book on a decade, we thought it might be interesting to have a quick peek at the MarketWatch report from December, 2009 - 10 years ago. Almost shockingly, inventory had quickly become an issue - as it has today - with the Chart - 2019-12 Toronto & GTA Home Sales YoY Summaryyear-over-year Total Active Listings figure falling through the floor to 10,292 available properties: A 47% drop from 19,468 12 months earlier! Understandably, with inventory that much tighter, the Days on Market [DoM] had dropped to 27, “40% faster” than December 2008’s 45 days. December, 2019’s “Total Actives” were 7,406 [Gulp!] and DoM was 29. Sales volume & average prices in 2009? $411,931 on 5,541 sales [which was a 115% spike from the last month of 2008 at which point the world was emerging from “The Financial Crisis”] versus $837,788 on 4,399 sales last month. Interesting.

The mortgage “Stress Test”. Interest rates low and, very likely, falling as some money moves to the safety of the bond market in the wake of “The [Latest] Iran Incident”. Many Boomers still sitting on the fence about downsizing… It’s a complicated scenario. 

It’s tough making predictions...especially about the future.” - Yogi Berra

More on Inventory

From a “Forward Inventory” standpoint [Total Active Listings divided by the month’s Sales volume], at December month-end we had about 1.68 months of inventory available. [It was 1.85 months one decade earlier.]

For a little more contrast, in the Spring of 2016 we described here in this blog the inventory level as “very tight” at just 1.17 months. By the following spring - 2017 - inventory levels bottomed at an unheard of [at least in modern times] .65 of a month...less than 3 weeks. Crazy. The average time to sell a home in March, 2017 was ten days.

Ahhh, memory lane…

History doesn’t repeat itself but it often rhymes.” - Mark Twain

The Numbers by Major Home Type

Detached home sales in Metropolitan Toronto totalled 465 in December, a 38% spike YoY, at an average selling price of $1,363,357, up 19.5%. Wow. The rest of the Greater Toronto Area saw 1,519 “Detacheds” change hands, a healthy 23% jump, at an average of $956,792, up a healthy 7.7%. Note that December's generally regarded as one of the slowest months of the year for home sales. Chart - 2019-12 [Final] Toronto & GTA Home Sales Historic Annual & Monthly StatsGenerally.

Another flashback, just for “context”: Detached homes in The Big Smoke averaged $1,578,542 on 1,268 sales at their “price peak” in April of 2017. The balance of The GTA - “The 905” [area code] - actually peaked the prior month at $1,124,088 on 4,672 sales. Hard to believe. Will we go back there? Who knows… In 1990 everyone thought we’d never see the 1988/1989 price peaks again.

I remember thinking in the Summer of ‘17 that it was time, as a Realtor®, to exercise extreme caution: The listing side of the business turned very frustrating as prospective sellers went into denial about softening prices - a phenomenon I’d witnessed personally in the early 1990’s - my first years in the business. On the buyer side in that Summer of ‘17 care also had to be exercised that people were well educated that the market may well continue to soften - which it did. But hindsight’s “2020” [ironically] and, ultimately, the decision belongs solely to the buyer. I’ve suggested many times over the course of my career that people exercise caution. What I’ve learned is that people will do - usually - what they’re going to do anyway - be it with me or with another agent if I’m not doing what they want. So much for professional opinion. But, again - I digress...apologies…

Condo Apartments in Metro Toronto saw 884 MLS® sales last month, up a respectable 5.1%, averaging $656,233, up 10.3% compared to last December. The rest of the GTA saw 371 sell, up 11.4%, at an average of $508,173, up 11.9%. Just for the record [!!], April, 2017 saw 2,148 Condo Apartments sell @ $578,280 average; those figures for the rest of TREB’s market area were 865 units @ $449,792.

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As noted above, December saw 4,399 MLS® sales of homes of all types and styles and across all of TREB’s market areas. That was a 17.4% rise from the same month one year earlier. The average sale price of those was $837,788, an 11.9% rise. All figures herein are year-over-year [YoY] comparisons unless otherwise noted.

Once again, Total Active Listings stood at 7,406 as of month-end, a 35.2% tank. “New Listings” [which include those terminated or expired & subsequently re-listed] totalled 3,531.

Quoted in the Report:

Toronto Real Estate Board President Michael Collins: "We certainly saw a recovery in sales activity in 2019, particularly in the second half of the year. As anticipated, many home buyers who were initially on the sidelines moved back into the marketplace starting in the spring. Buyer confidence was buoyed by a strong regional economy and declining contract mortgage rates over the course of the year."

TREB's Chief Market Analyst, Jason Mercer: "Over the last ten years, TREB has been drawing attention to the housing supply issue in the GTA. Increasingly, policy makers, research groups of varying scope and other interested parties have acknowledged that the lack of a diverse supply of ownership and rental housing continues to hamper housing affordability in the GTA. Taking 2019 as an example, we experienced a strong sales increase up against a decline in supply. Tighter market conditions translated into accelerating price growth. Expect further acceleration in 2020 if there is no relief on the supply front."

OK. Price growth without supply relief pretty much goes without saying. #Economics101 - But we keep hearing references to a “housing shortage” in and around Toronto, or variations thereof. Inventory’s obviously an issue. Does that mean we should plough under the greenbelt and all the farmland? That’s crazy. And short-sighted. Perhaps the answer is simpler...and [at least] two-fold: 1] Increase density rather than catering to developers’ profit margins & allowing unbridled urban sprawl, and 2] create policies that make it more attractive for employers to locate beyond Toronto and the GTA.

Many outlying towns became less sustainable economically as jobs moved to the big urban areas...and people - naturally - follow them. Younger people in particular, of course. 

But if we can provide more fertile economic ground in those smaller centres, jobs will return - and people can better afford the homes near those jobs. Is this not painfully obvious?

Until something “bigger picture” changes...interest rates normalize...or more Boomers decide to move further afield and take some cash-free cash off the table to pad retirement accounts... [Of course, one of the reasons Boomers may be sitting tight is that a good number of them would love to downsize to a Bungalow - but Bungalows are in short supply - and high demand - all over Toronto & The GTA...and beyond, for that matter]... or home sales absolutely tank… it’s hard to fathom significant relief on the inventory front.

The more things change, the more they stay the same.” - Jean-Baptiste Alphonse Karr

Note the 2019 Year-End "Sale by Price Range and House Type" chart is included at the bottom of this post.

Finally, December’s “Average 29 Days on Market” noted above meant homes sold “6.5% faster” than last December.

Thank-you very much for stopping by. We wish you a fabulous year - and decade - ahead. “The Roaring ‘20’s, 2.0”? Let’s hope...well, the first 9+ years anyway.

- Andrew, For theBB.group and JustBungalows.com

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Chart - 2019-12 [Final] Toronto & GTA Home Sales Historic Annual & Monthly Stats
Some charts/data may exclude minor data points due to space restrictions. Refer to originals for full detail. All charts & data Copyright® 2020 Toronto Real Estate Board and/or theBB.group. E&OE.