Happy 2024.

The year starts with a sense of new optimism from many as it should but storm clouds could be around the corner depending on who you talk to.

With Bank Of Canada expected to start cutting rates some time in the next few months I have noticed that sentiment, especially buyers sentiment has shifted from “let’s wait and see” to “lest start seeing”.

Showings seem to be up the first 2 weeks of the year, listings that were not getting any showings in late November and December are suddenly receiving showings, inventory for condos and freehold homes has shrunk and we are hearing from some sellers who did not want to sell in a very sluggish second half of 2023 with renewed optimism that this spring is a better time to sell. Historically they are correct, best time to list your home in the Toronto market is mid February to Mid May as thats when most buyers become active.

Let’s look at the numbers to end 2023.

There were 65,982 home sales in 2023, this was down (12%) from the 75,140 sold in a slow 2022 and a far cry from the record breaking year of 2021 where we saw sales of 121,611. To put this all in context the MLS usually averages between 90,000 – 100,000 in sales annually.

FREEHOLD HOMES

The average price of a Freehold home in the GTA has been flat the last 6 months or so since it came down from 1.5M in May 2023 to holding around 1.3M. Keep in mind this is for all of the GTA for Freeholds only. See chart below.

With regards to Freehold inventory. We are currently sitting at 3 Months. This means if we get no more listings tomorrow we will sell out of all Freehold homes in 3 Months. Thats the speed of the market which means it’s balanced and not moving too fast or too slow. At the height of the market frenzy in March 2022 we had less than 1 Month of inventory and bidding wars ensued everywhere for everything. We are not seeing anything like that today but the nicer homes in prime areas in the sub 2M and especially the sub 1.5M market are seeing activity just not too many bidding wars.

CONDOS

The average condo price in the GTA has come down to $708,000 to end the year, pretty much flat from December 2022 when it was $705,000 and down from the $840,000 average it held in March of 22.

Looking at the chart below we can see Months of Inventory for Condos sits at 5.2 Months which points to balanced market as a whole but some opportunities for buyers exists as some areas of the city are seeing inventory above 6 months which would be a buyers advantage as the condos in these areas are sitting for much longer.

SUMMARY

Overall combined Freeholds and Condos the market has 3.8Months of inventory in all of the GTA suggesting a balanced market but again important to note each area is a bit different as inventory levels may be higher and thus is more of a buyers market. If you are interested in finding out what inventory levels are like in a particular neighbourhood feel free to email me and Id be happy to send over an update for that area. Of feel free to click the link and research yourself. https://www.realosophy.com/greater-toronto-area/neighbourhood-market-trends

Of course we haven’t seen the new spring listings pick up as it’s early in the year but they will come in the next 30 – 120 days. The question will be will buyers follow suit and also enter the market or continue to sit on the sidelines as they did in the fall. Early signs on the ground suggest more and more buyers are now preparing to buy, asking questions, setting up home alerts and slowly starting to head out to showings. Will this activity turn into actual transactions is the question. Sentiment is positive but as we have seen in the past a Bank Of Canada announcement that doesn’t sit right with buyers pushes them back into pause mode. The other storm cloud is the R word. Will we enter into a full blown recession and if so how bad will it be? On the flip side if inflation continues to cool and BOC cuts rates in the coming months this could have the opposite affects on the market.

Here is a great article by David Larock unpacking what we may see in 2024 with regards to rates
https://www.movesmartly.com/articles/canadian-mortgage-and-real-estate-predictions-for-2024

As always any questions or comments are welcomed, feel free to reach out anytime. Wishing you and yours a healthy and happy 2024!