Toronto, Ontario, January 6th, 2021 - There we have it: A crazy year in the books. But wait...this new one looks like it might be just as crazy! Or worse... Not just a virus; "variants". Real estate. The Wealth Gap. Cryptos. Politics. People… markets… entire economies… polarization...
Toronto and GTA Realtors® today released their own version of “crazy”: The monthly “MarketWatch” residential MLS® home sales stats for December, 2020, which reflected what most who were paying attention already knew: after the Spring Market [so much for predictions...again...] being largely "put on hold” due to the pandemic, the local residential real estate market shifted into high gear around mid-June and never looked back.
Home Sales: 2020 (in) Hindsight
Before we get into December numbers specifically - which, just for the record, were a record in activity terms for that month - here are some quick notes on the residential real estate market as a whole in 2020:
- Total sales volume reported through the TRREB MLS® System rose 8.4 percent to 95,151 homes compared to 2019.
- As people moved away from the more densely-populated areas - many taking advantage of “WFH” - Work From Home - it was the Regions on the perimeter of Metropolitan Toronto that saw the greatest growth in sales volume - particularly in the “low-rise” home type sector.
- The overall sale price also saw a new record on the year at nearly $930,000 - including all home types & styles and all of TRREB’s market areas - a 13.5% increase.
- While the Condo Apartment sector was very weak as the pandemic took it’s toll and people moved away from hi-rise type homes with their "icky elevators" and common areas, that sector came roaring back by year-end in terms of sales volume, if not price. If the volume keeps up, naturally the prices should follow.
As mentioned above, overall sales activity in the month of December was a record 7,180 transactions reported. That’s a stunning YoY spike of 64.5%. December’s average selling price was $932,222, up 11.2% versus December 2019. Not surprisingly, that “perimeter of Toronto” - with it’s higher sales volume - also saw higher growth in prices than The Big Smoke. See the section below as well as the “Sales & Average Price By Major Home Type” chart included herein for more detail.
Many industry watchers expect this trend to reverse to some degree as vaccinations progress - albeit slowly; restrictions are eased; businesses begin to re-open and to varying degrees want their employees back in the office; and perhaps people see better value in T.O. homes versus the “exurbs” with the price gap between those two areas having narrowed somewhat.
Not surprisingly, with inventory still relatively tight in the face of demand - driven in part by record-low interest rates - the average home in Toronto and The GTA sold “17.2% faster” at 24 Days on Market [DOM] compared to 29. All figures quoted herein are year-over-year comparisons unless otherwise noted.
Detached sales in Metro Toronto finished December at 657, up 41.9% at an average sale price of $1,475,758, up 8.1%. Maybe people are already looking ahead to post-pandemic. In the balance of the Greater Toronto Area, 2,381 sales of Detached homes were reported, an incredible - particularly for December - romp of +58.5%. The average sale price there was $1,175,753, up a robust 22.7%. So much for December generally being “the slowest month of the year” for residential sales.
Sales of all home types saw remarkable growth. Townhomes in Metro T.O. were up 60.9%; in the balance of the market area “Towns” saw an 82.3% jump in activity - no doubt in part, at least, to their more moderate price point versus the other low-rise home types.
Condo Apartments in Toronto saw a strong rebound of 75.9% to 1,551 units averaging $625,828, down 4.7% - the only “minus sign” in the report aside from the “time to sell” numbers [DoM / PDoM]. Activity in the balance of the GTA virtually mirrored the City with a 74.5% rise to 642 sales. The average price of those sales was $540,472 - a respectable 6.3% increase.
“Forward Inventory” - calculated as Total Active Listings divided by the month’s Sales volume in order to gauge “supply versus demand” within the context of time frame - stood at a just over one month [1.099 months] as of month-end - very low by historical standards even though 7,892 homes on the market represented a 6.6% rise YoY.
“New Listings” spiked 66.1% to 5,865 in December - note that that number includes listings that were terminated and “re-written” / re-listed...though there’s not much of that going on under present market conditions - perhaps as sellers decided to take advantage of demand dynamics and take some money off the table to pad retirement accounts in the process. If that's accurate, it would certainly explain the heightened level of interest in our Bungalow-focused website - the “Google® favourite” Bungalow and one-storey homes website to the best of our knowledge. Bungalows for sale in all areas of Toronto and The GTA are not staying on the market long.
So... what about when we get back to some semblance of “normal”... More people get back to work… Immigration returns... The economy begins to improve…? There’s the big question - and one that generates as many varied answers as any we’ve heard asked in a very long time. Obviously interest rates may be the… or a… fly in the ointment. Forget Central Bank policy: Interest rates are ultimately determined by the bond markets. Keep an eye… We don’t believe rising rates are imminent by any stretch, but they can’t stay at or near record lows forever, either.
Quotable from the report…
TRREB President, Lisa Patel: “The Greater Toronto Area housing market followed an unfamiliar path in 2020. Following the steep COVID-induced drop-off in demand during the spring, home sales roared back to record levels throughout the summer and fall. A strong economic rebound in many sectors of the economy, ultra-low borrowing costs and the enhanced use of technology for virtual open houses and showings fuelled and sustained the housing market recovery.”
TRREB Director, Market Analysis, Jason Mercer: “While the housing market as a whole recovered strongly in 2020, there was a dichotomy between the single-family market segments and the condominium apartment segment. The supply of single-family homes remained constrained resulting in strong competition between buyers and double-digit price increases. In contrast, growth in condo listings far-outstripped growth in sales. Increased choice for condo buyers ultimately led to more bargaining power and a year-over-year dip in average condo selling prices during the last few months of the year.”
As always, thank-you for stopping by. We wish you a fabulous year, even with it’s... ummm... complications. Work together; look after each other; #StaySafe ...and don't forget your mask.
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