May 2024: Toronto & GTA MLS® home sales: Inventory Nearly Doubles YoY

Greater Toronto, Ontario - Friday June 7, 2024 - Toronto and GTA Realtor® members of the Toronto Regional Real Estate Board [TRREB] released the residential MLS® sales statistics on Wednesday via their monthly publication, MarketWatch. As trends tend to do, the recent one continued as sales volume compared to the year earlier period fell more than twenty percent and available inventory rose significantly in terms of both “Newly Listed” homes and - far more relevant - “[Total] Active Listings”.

Buyers as well as existing homeowners saw it as a most welcome day as the Bank of Canada also announced a rate reduction of one quarter of one percent which brought the overnight rate and the deposit rate down to 4.75% and the Bank Rate to an even 5%. This is the BoC’s first rate cut in over four years and, naturally, it improves home buyers’ buying power while also easing the angst to some degree of homeowners facing mortgage renewals at higher rates over the near-to-medium term. Many expect further reductions: Stephen Brown of Capital economics says the wording of the Bank’s release is suggesting that Canadians might enjoy further reductions in all four of the announcements over the rest of 2024. The next is due in July.

Overall…

…meaning all home classes [e.g. Freehold, Condo, LandLease, etc], types [e.g. Detached, Semi, Towns, Condo Apartments, etc], and styles [e.g. Bungalows / One storey, 2-Storey, Split-Level, Apartment, etc] across all of TRREB’s primary market area… 7,013 sales of homes were reported on the month, down 21.7% compared to last May.

The average price of May’s sales came to $1,165,691, off a modest 2.5%.

Due to the strong seasonality of the residential real estate market, all figures reported herein are year-over-year [YoY] comparisons except where noted otherwise specifically. It’s also worth noting that in recent years - particularly since the impact of COVID-19 began to be felt - that “market seasonality” has moderated considerably.

A couple of other notes of interest:

Sales of Detached homes in Metro T.O. were up nicely from April's total... though down a little for the rest of the market area [generally referred to as "The 905"... area code].

We got an education this week that we didn't even know we needed! #IYKYK ["If You Know, You Know!]: Stats provided by the Board's monthly MarketWatch Report are for TRREB's "primary market area" only. Fair enough; good to know. That, again, is "The Big Smoke" / City of Metro Toronto proper; the broader surrounds, commonly known as "The GTA", and the Regions & Counties immediately around those. "Total Active Listings", for example, were quoted as 21,720 for this primary area as of month end. TRREB includes lots of listings beyond that area, however: The overall total for all of TRREB's residential listings was about 44,000 as of month-end. That's up from the April figure of about 36,000; March's ~30,000; February's ~25,000; and January's ~23,000. It was about 25,000 at the end of May, 2023.

If you're interested, you can get Bungalow-Specific intel here on our QuickStats page which has backlinks to archives of same going back years. That might be of interest if you want information on Bungalows / One Storey homes anywhere in our South-Central Ontario market area.

If you want the current update for Bungalow activity, average prices, property taxes, etc., the May, 2024 update is here.

There's also an "InfoGraphic" at the bottom of this page for a quick visual snapshot of this month's key GTA resale housing market statistics as tracked by TRREB's MLS®.

Specific Numbers by General Area & Major Home Type

In Metropolitan Toronto there were 815 sales of Detached homes reported, down 11.4%, averaging a selling price of $1,826,370, a drop of 4.5%. In the balance of TRREB’s market area - the Greater Toronto Area and its immediate surrounds - 2,387 “Detacheds” were reported sold, down 21.9%, at an average of 1,392,699, off 3.5%.

Condo Apartment sales volume took it on the chin across the area though prices held up pretty well: Sales in T.O. totalled 1,297 units, down 23.2%, at an average sell price of $767,064, off 2.3%. The balance of the “GTA+” saw 645 units sell, down 25.8%, averaging $657,925, off an even three percent.

The Inventory Picture

Homes “newly listed” for sale were up 21.1% - nearly identical to the drop in sales volume, ironically - 18,612 hitting the market.

While that “”New Listings” stat is the more widely watched, generally speaking, we actually prefer the more relevant [Total] Active Listings [TAL] because it represents a clearer picture of the state of the market - #SOTM - from an inventory standpoint. That came in at 21,760 as of month-end: A hike of 83.3% which, as referenced above, is good news for Home Buyers.

“Forward Inventory” [TAL / divided by the month’s sales volume] gives us an idea of market health in terms of how long it would take to clear all that current inventory given a constant rate of sales volume. That comes to a hair over three months’ inventory which, while continuing the trend of late in that regard as relative sales volume has obviously slowed, it’s also much more in line with historical norms than we’ve seen in quite some time - contributing largely to the unprecedented run-up in home prices over that period. So much for the “housing shortage” which we’ve also questioned strongly here before. Shortage? No. Affordability crisis”? Obviously. We’ll see how far that moderates. Not so sure the ¼% rate cut will have a huge impact, but maybe over time if we see THAT trend continue.

“Absorption Rate” - the rate at which the market “absorbs” those “Newly Listed” homes as actual sales [Sales / New Listings] - stood at .377 …a long way from last May’s .593 …obviously we’re not “absorbing” newly available inventory at such ravenous rates. Which stands to reason, of course. Just pointing it out. Then again, we’ve said for a long time the market was in “unsustainable” mode… and that prevailed far longer than we thought it would here at theBB.group Real Estate.

The time it took to sell a home was 19 “Listing Days on Market”… “35.7% slower” than a year ago… though still “PDQ” - pretty darn quick - by those historical norms we love to reference. “Property Days on Market” - days a property was listed with the same brokerage before selling - was 28: “40% slower”. That PDOM figure includes time on the market where a prior listing was terminated & re-listed but - again - not if the seller changed agents / brokerages so that stat is “incomplete”. Re-writing a listing often coincides with a price reduction - the new lingo for which is “Price Improvement” for many.

We also notice that multiple offer situations are still occurring not infrequently - particularly for any well maintained & presented homes and for Southern Ontario Bungalows for sale in particular. For people dreaming of living a Single Storey Lifestyle that style of home remains relatively rare and in very high demand across TRREB’s market area [and beyond!] with “Matures “ & “Empty Nesters” downsizing and taking advantage of still-high prices, very often taking tax-free - n the case of principal residences - cash off the table to pad retirement accounts, help the kids buy into the market, and so on.

Quoting… From the Report:

TRREB CEO John DiMichele:
“In order to have an affordable and livable region over the long term, we need to see a coordinated effort from all levels of government to alleviate our current housing deficit and to provide housing for new population moving forward. On top of this, governments need to ensure the delivery of infrastructure to support our growing population. The economic health and liveability of our region depends on the timely completion of public transit projects including better transparency and clear timelines on the completion of the Eglinton Crosstown LRT.”

TRREB Chief Market Analyst Jason Mercer:
“While interest rates remained high in May, home buyers did continue to benefit from slightly lower selling prices compared to last year. We have seen selling prices adjust to mitigate the impact of higher mortgage rates. Affordability is expected to improve further as borrowing costs trend lower. However, as demand picks up, we will likely see renewed upward pressure on home prices as competition between buyers increases.”

TRREB President Jennifer Pearce:
"Recent polling from Ipsos indicates that home buyers are waiting for clear signs of declining mortgage rates. As borrowing costs decrease over the next 18 months, more buyers are expected to enter the market, including many first-time buyers. This will open up much needed space in a relatively tight rental market,

Don’t be NOSI

Finally - in this post and in the big picture - our fearless leaders have finally stepped up to the plate and abolished - immediately - the all-too-common practice of scammy outfits registering an interest against the title of your property for rental appliances, primarily. Predatory rental contacts in particular. Often they target older folks who are just trying to “keep the heat on” on limited incomes and so opt for the “lower monthly payment” angle.

These outfits’ “interests” were registered on the title to the property in the form of a legal document called a NOSI, or Notice of Security Interest.

These also have become a big problem when a home sells and that rental contract has to be bought out - often because the new owner / home buyer wants nothing to do with assuming it - and that buy-out under the terms of the original rental “agreement” is often far more money than the appliance was worth in the first place.

Thankfully, all NOSIs currently in place are also automatically deemed expired by the Provincial government's legislation which - in a refreshing show of cooperation between political parties - was actually backed by all the parties so we’re told.

Maybe now the powers that be can turn their attention to getting scaled back the ridiculous ”institution” referred to in the majority of Agreements of Purchase and Sale of real estate as “HWT [R]” - for “Hot Water Tank is a rental”. It’s another example of often over-charging for something by way of a rental contract and it’s time it went away. Seriously. Why water heaters? Why not rent the range hood and the bathroom fan, too? 🤷‍♂️

So... apologies for the rant. At least the NOSI thing is a big step in the right direction. Happy “Late Spring” to you… summer’s on the horizon 😎🌻. Get out there… the leaves will be turning 🍁 before you know it… right around the time the Maple Leafs win the cup 🏆… again… in October! Have a great one; thanks as always for stopping by…

Andrew.

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