Greater Toronto, Ontario - Wednesday, March 4, 2020 – Toronto Regional Real Estate Board president Michael Collins this morning released the Board’s monthly “MarketWatch” publication which showed “very strong year-over-year sales and price growth”. Indeed - sales up over forty-five percent and prices up nearly seventeen percent amidst the breaking story that is “The Coronavirus”. Time will tell what impact that has on the residential real estate market and the broader economy in general.
Total overall sales - meaning TRREB‘s entire market area and all types of homes - were 7,256 on the month, a 45.6% spike over last February’s [adjusted] 4,982. This February’s overall average sale price was $910,290, up a healthy 16.7% [$779,791 twelve months earlier]. All figures herein are year-over-year comparisons unless otherwise noted.
Inventory tanks further as sales volume rises
February’s Total Active listings stood at 8,816, an incredible 33.6% drop from the year earlier figure. With strong buyer demand - partly influenced by low interest rates - a chronically low inventory, naturally we have above-average price growth...not great news for buyers, obviously - particularly the “first-timers”.
The number of “Newly Listed” homes was 10,613 in February, up 7.9%.
For contrast, here are the inventory numbers for the four most recent Februarys, taking us back to just before the “modern day paek” in the Spring of ‘17:
[For each of the months: Total Active Listings; New Listings; Forward Inventory [= Total Active Listings / Month’s Sales]; Absorption Rate, or “Sales-to-New-Listings Ratio” [= Month’s Sales / New Listings]; Overall Average Price; and YoY Price Change]:
February 2020: 8,816; 10,613; 1.21 months; .68; $910,290; +16.7%
February 2019: 13,284; 9,828; 2.64 months; .511; $780,397; +1.6%
February 2018: 13,362; 10,520; 2.58 months; .492; $767,818; -12.4%
February 2017: 5,400; 9,834; .67 months; .815; $875,983; +27.7%
Note that overall average price now compared to that of the February, 2017 “almost peak”. Interesting…
“Forward Inventory”, calculated by dividing Total Active Listings [TAL] by the month’s sales total, stood at just 1.21 months. The Absorption Rate - the rate at which the market’s “absorbing” [e.g. selling] new inventory - is calculated by dividing the month’s sales total by the number of newly listed homes. That was .684 for February.
Specific Numbers: Major Home Types
Sales in the Detached homes group jumped 54% in Metro Toronto to 716 units averaging a selling price of $1,485,304, up 14.4%. In “The 905“ area code - the balance of the GTA - 2,760 Detached homes sold, up an incredible 64%, with the average sell price creeping over the million dollar mark at $1,017,573, up 14.1%
Generally speaking, the Condo Apartment market figures look pretty ho-hum next to the Freehold market figures, but they too were very strong: 1,335 Condo Apartments sold in Toronto, up 26.2%, averaging $722,675, up 18%. In the rest of the GTA 571 sold, a 21.7% rise, averaging $534,688, a very healthy 19.3% jump.
Homes sold “over 30% faster” this February at 17 “Listing Days on Market” versus 25 last February. The more indicative “Property Days on Market” was 23 this year versus 36 last.
What’s the difference between “LDOM” and “PDOM”? Average Listing Days on Market (Avg. LDOM) refers to the average number of days sold listings were on the market. Average Property Days on Market (Avg. PDOM) refers to the average number of days a property was on the market before selling irrespective of whether the property was listed more than once by the same combination of seller and brokerage during the original listing contract period.
Note the chart of sales volume by price range and house type included at the very bottom of this post.
Quotes from the report:
Michael Collins, TRREB President: “Sales growth will be strong this year. TRREB's forecast published in its Market Year in Review and Outlook Report on February 6, is calling for 97,000 sales in 2020. However, the annual pace of sales growth experienced in February will likely not be sustained throughout the year, because we will be making comparisons to much stronger sales results reported after the first quarter of 2019.”
TRREB’s Director of Market Analysis and Service Channels, Jason Mercer: “A key difference in the price growth story in January 2020 compared to January 2019 was in the low-rise market segments, particularly with regard to detached houses. A year seems to have made a big difference. It is clear that many buyers who were on the sidelines due to the OSFI stress test are moving back into the market, driving very strong year-over-year sales growth in the detached segment. Strong sales up against a constrained supply continues to result in an accelerating rate of price growth..”
For “Bungalow-specific” average prices and other statistics broken down by Toronto, GTA, and South-Central Ontario Region, please click here.
On the broader, national level Teranet and National Bank referred to February’s figures as “A Vigorous Gain”.
Thanks for reading... Drop a line anytime if there's anything we can do for you. - Andrew.
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