July 2020: Toronto & GTA MLS® home sales: Hotter than the “Dog Days”
Tags: BUNGALOWS, TORONTO, GTA, GGH, ONTARIO, MARKET STATISTICS
Toronto, Ontario - August 6, 2020 - The Toronto Real Estate Board’s monthly residential real estate statistical report was released today by Board President Lisa Patel showing a stunning 29.5% jump in sales volume
made July’s 11,081 sales reported by Toronto and GTA Realtors® through the Board’s MLS® System a record for the month
. So much for residential real estate slowing for the Dog Days of Summer. This was, effectively, “Spring in July” (as opposed to “Christmas in July”...ahem ...never mind) as buyers and pent-up demand made up for a Spring Market all but lost lost
to the pandemic.
Further, with inventory remaining at stubbornly low levels, Average Prices continued their upward surge climbing 16.9%
over July, 2019
. All figures quoted herein are year-over-year comparisons unless otherwise noted.
In Metropolitan Toronto - “The 416” (area code) - 1,102 sales of Detached homes were reported, up 27.5%, averaging a sale price of $1,541,003
, a nearly unbelievable jump of 25.5%
. The balance of the Greater Toronto
Area - “The 905” - saw 4,531 Detached sales, an even more astounding 48.3% spike
, at an average sell price of $1,060,318, up a relatively unimpressive 14%! Is this sustainable?
Overall sales including all home types and all of TRREB’s market area - jumped 29.5% to 11,081 units as noted above. The overall average sale price was $943,710, up 16.9%. The strength came predominantly from the low-rise / freehold sector rather than the Condo sector: While the latter was still relatively strong by historical standards, some believe there’s re-thinking going on about sharing elevators and common areas as the COVID-19 pandemic persists.
Still, MLS® sales of Condo Apartments rose 4.7% in Metro T.O. to 1,689 units at an average of $682,999, up a very respectable 8.8%. The balance of the GTA saw 734 sales, an 11.7% volume gain, averaging $527,117, up 10.6%.
Both sales and listing inventory tend to fall off in July and August. This summer, sales obviously continued very strongly, but inventory levels remained weak - thus the price strength. Total Active Listings were down 16.3% to 15,018 homes on the market available for purchase. “Forward Inventory” is calculated by the total number of
active listings divided by the total sales volume, 15,018 / 11,081 which represents less than six weeks of supply - still stubbornly low by historical standards
. The “Absorption Rate” - the rate at which the market is “absorbing” new inventory - is calculated by dividing the number of sales by the number of NEW listings on the month… so 11,081 / 17,956, or “.617”.
Some observers / pundits are calling for a decided increase in inventory come Fall, 2020: Several thousand households have been deferring their mortgage payments under relief efforts offered in the face of job losses brought about by the pandemic. Those are deferrals, remember - not "grants". This Fall, it's expected that deferrals will cease and payments once again will be required. Thus, the logic goes, many who have been financially compromised by the economic ravages of this pandemic will be forced to list their homes for sale
. "Not so fast", say others: The flip side of the coin is that the last thing mortgage lenders want is to own their customers' homes. They'd much rather keep the customer in the home and making payments as agreed in the first place. So instead of blindly forcing the issue, terms will be negotiated to ease the burden and buy more time...extending amortization periods, for example. Regardless of how that plays out, a lot of mortgage payments have been deferred, are still accruing interest, and will have to be paid at some point...
Toronto & GTA Bungalows…
Well, it’s one of our favourite topics; certainly our favourite housing style. And July saw a record in traffic for our flagship website, JustBungalows.com
- testament to the rapidly growing popularity of one-storey living...combined with your own back yard. This trend has been in motion - and accelerating - for some time as evidenced by the traffic to that website if nothing else. The increase in that acceleration, we believe, is clearly the result of a few different (but largely related) factors
• Empty Nesters downsizing...and often taking some (tax-free) dollars off the table to pad retirement accounts...at an increasing rate.?
• People generally re-thinking “congestion”...wanting their own backyards and a little more distance.?
• The apparent re-think - to some degree - of the Condo high-rises and their elevators, common areas, etc., as noted above.?
• The sudden trend toward working from home: Even if an employee is only required to go into the office half the time they used to go, they’re very likely willing to put in a little more commute time given that they don’t need to commute as often.? And, if you're going to start working from home - even "part-time", you may need differently configured space. An extra bedroom for an office, or a finished basement, for example.
“Quotable”...from the report:
TRREB President Lisa Patel: “Sales activity was extremely strong for the first full month of summer. Normally we would see sales dip in July relative to June as more households take vacation, especially with children out of school. This year, however, was different with pent-up demand from the COVID-19-related lull in April and May being satisfied in the summer, as economic recovery takes firmer hold, including the Stage 3 re-opening. In addition, fewer people are travelling, which has likely translated into more transactions and listings,”
TRREB Director of Market Analysis, Jason Mercer: “A gradually improving labour market and historically low mortgage rates are expected to support a recovery in home sales in the second half of 2020 along with sustained year-over-year price growth. Given that home sales result in substantial spin-off expenditure in the regional economy, the housing market will be an important driver of overall economic recovery this year and into 2021.”
Finally, homes sold about “25% faster” this July compared to last. The “LDOM” - or Listing Days on Market - refers to the number of days the average home was “currently” listed before selling (17 days vs 23). The “PDOM” - or Property Days on Market - tracks the number of days the property was listed with same Brokerage before selling (25 days vs 33). In other words, if a property was listed, then the listing terminated and re-listed by the same broker (e.g. at a different price, for example), that latter figure includes the total number of days. Unfortunately, at this point, the system does not track total Days on Market where there is more than one brokerage involved (e.g. if a listing “ends” and the seller opts to re-list with a different agent/brokerage).
Thanks again for stopping by! Enjoy these waning weeks of warmth! What a beautiful summer it’s been on the weather front...