What’s Behind So Few Sales?
As we kick off a new year, we look to new opportunities and new goals. We wish you and your family a happy new year. May it be healthy and full of possibilities.
The 2023 market was the year of the fewest transactions in Toronto since 2002. In fact, more than 8,000 fewer at 65,982. Interestingly, TRREB began tracking in 2002, and the population of the GTA was 4 million fewer.
Why was this? For a myriad of reasons. We know all too well that higher interest rates were higher than people we used to and that the media, many financial pundits and financial institutions were predicting a dive in the economy and stock markets. Hmm, that’s different from what happened. In fact, the equity markets had a bounce-back year, up roughly 20% in some cases. People have yet to give their houses to the banks due to the inability to make payments. The banks adapted with flexibility. Who would have seen that a year ago?
Why so few sales last year? Simply put, the buyers’ and sellers’ expectations were incongruent. Sellers were looking for 10-20% more than the current market would bear. Similar to what their neighbour’s house sold for a year before. The other side of the coin was the buyer looking at a higher interest rate than their friends, and they froze. Those buyers were like a deer in headlights, not sure about accepting the interest rate really (which is now roughly the historical average – frankly not something to be worried about), and those who could move forward to make an offer would offer lower than said Sellers were willing to accept (see above point). The other overarching factor was that many of those would-be sellers didn’t list because they also froze; they chose to hold off on their sale, waiting for that higher value.
The wise advice in today’s reality: trade in and out of the same market. Don’t look at sales in a vacuum. Moving up? This is the best time as you will take advantage of the lower dollar cost difference (for example, a 1.5m house discounted 10% is 1.35m; the 800k condo discounted 10% is 720k. The dollar savings for moving up in this example is 70k.) Look at the long-term, which in real estate is 5++ years. Keep a focused eye on where you want to go and manage today’s decisions with that horizon in focus.
Toronto Real Estate Market Report – November 2023
December 2023 has been quieter than expected. The sales stats are far different than our experience on the ground. The sales numbers have come in, and we have seen a large drop in total sales, in fact, the lowest tracked number of sales we have seen in over two decades at the Toronto Regional Real Estate Board. There were only 601 sales. Our overall annual markers will provide a better sense of value increase, which you can reach out to us here to discuss.
Detached Home Values
There were 113 sales in central Toronto in December 2023. The average home sold for $2,232,656, Down 7% since December 2022. The average home was on the market for 29 days – more in line wiht TRREB stats.
Semi-Detached & Townhouse Values
There were 101 sales in central Toronto in December 2023. The average home sold for $1,402,868, up 10% since December 2022. The average home was on the market for a similar amount of days compared to the TRREB days-on-market average.
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Toronto Condo Values
There were 483 condo sales—the average central Toronto condo sold for $810,241, down 2% from December 2022. The average condo was on the market for 33 days – this is an increase of days on the market compared to the previous month. Note that the correction has not impacted Toronto condos as much as the freehold housing market.
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