Newsletter

November sales are in and once again the story is, no inventory, high demand, with the average selling price reaching a new all time high for all home types coming in at 1.163,323 up 21.7% from November 2020.

In total 9,017 homes sold on MLS in November 2021 in the GTA, thats up 3.3% from last November. New listings were down 13.2% since last November.

Detached homes in 416 Toronto averaged a staggering 1.807M in November 2021, this being the category were available inventory is at its lowest. Condo inventory is also very tight and demand strong with the average price in the GTA at 715,104 in November 2021.

On the ground its still busy, which is odd given its mid December, usually most buyers take a break by now but as of Dec 13th Im seeing homes from Scarborough to Oakville get multiple offers, same goes for Condos in Toronto. Anything priced under 2M is getting plenty of activity. That being said most of the bidding wars that get 10+ offers seem to happen outside proper 416 or if they are happening in the 416 I see them on condos priced $750K or less.

Safe to say that some buyers will continue to look through the holidays as there is pent up demand and many have been frustrated at the process to find a home this fall. To make things worse new buyers are planning their search now and will be jumping in over the next few weeks. January – April is a very busy time in the market because this is when most buyers start, this is also the time when we usually see prices soar the last few years because of low inventory and super high demand.

Sellers on the other hand are either on the sidelines watching as prices skyrocket, some deciding to keep their properties while buying another if they can afford to do so or others that plan to sell need to buy before they sell, in which case the bottle neck of new buyers vs no listings is further being exasperated. Its so hard to buy right now that sellers are worried about selling first and not being able to get back into the market, so they choose to buy first.

As always any questions or concerns feel free to message me. Wish everyone a very happy and safe holiday season and new year!

Home sales in the GTA hit the second highest level on record for the month of October. Inventory has shrunk again with even less options for buyers. We are down to just over 1 Month of inventory available for sale in Toronto and just .81 Months for all of the GTA. Meaning, we will sell out of all home types in a month or less if no other listings come on the market tomorrow in the entire GTA. We track Months Of Inventory (MOI) to understand how quickly or slow the market is moving at any given point. Anything under 4 Months is a sellers market and moving fast which causes price to accelerate, 5/6 months of inventory is a balanced market which causes prices to stay reasonably flat and anything over 6 months of inventory we usually see prices drop.

As you can see with only 1 month available to sell we are currently at warp speed. With so few homes to choose from its become frustrating for buyers, especially in the freehold market, condos have a bit more inventory but still very competitive depending on the areas.

The biggest change Ive seen on the ground in October is more investors have jumped in. 2021 has been a year we have seen investors drive the market more so than usual, last time we have seen this type of activity was back in late 2016 early 2017, shortly after the government put in place the Ontario Fair Housing Plan. The difference was earlier in 2021 it seemed a bit more balanced when it came to competition between primary home buyers that want to live in the home vs investors, wether it be mom and pop investors taking equity out of their homes to buy a second or even a third property or contractors/flippers and non resident investors. The last half of October however it seems everyone wants to buy a Pre- construction Condos, an investment home in Peterborough to rent out or a duplex in Riverdale. Im starting to feel a bit more like a Stock Broker than a Realtor.

So is there a silver lining for buyers looking to buy to live in wether its a first time homebuyer or someone looking to upsize/downsize?

In the short term I do not see any relief. Just to put things into perspective Inventory has to quadruple to just get us to a balanced market never mind thinking about prices coming down. Demand has to basically disappear and sellers that are currently on the fence need to start listing to get us more inventory. I don’t see any of this happening in the next 6 months.

However, if rates continue to rise like they have this month, as some banks are forecasting 4-8 rate hikes in the next 2 years. We then could see investors take a break and demand calm. After all, the reason everyone wants to invest in Real Estate today is the gains and money is currently cheap. Nothing wrong with that as long as you do it in a smart way by crunching the numbers and understanding what your long terms plan and risk is.

Buying a secondary property at an interest rate of 2% can make the numbers look attractive. Buying the same property at 3.5% interest rate and all of a sudden the returns look a bit less attractive. If this happens and rates head north of 3% towards the end of 2022 I would expect more investors to stay on the sidelines and take away some of this recent demand, this in turn could lead to some inventory taking a bit longer to sell and we could hit MOI of 2 or even 3 months towards the end of next year.

Important to note, this will not cause prices to fall as its still a sellers market with 2-4 months of inventory but it could at least remove the aggressiveness we are seeing from buyers today which is causing the unsustainable 25% appreciation of prices year over year.

All charts available at Realosophy.com

As always if you have any questions feel free to message me. #torontorealestate #toronto #torontohomes

Hello October

The fall market is in full gear with sales dropping slightly by 4% in September. One would think this would also mean that prices would also decrease.

Unfortunately for the many home buyers out there that’s not the case. Prices are up 6% year over year for all home types.

Leading the way are freeholds, up an incredible 26% over last year. Freehold’s in September 2021 shot up to 1.4M, this is a big jump from the August 1.3M average which had held steady throughout the summer months.

We initially saw a big jump on average Freehold prices from Jan 2021 – April 2021 when sales and appreciation skyrocketed lead by high demand and low inventory.
After a slightly calmer summer here we go again with record low inventory and buyer demand still high.

Freehold inventory is at historic lows with only 1600 active listings available in the GTA (see slide 3). The GTA has less than 1 month of inventory (slide 4) before we sell out of all Freeholds. A balanced market should have 4-5 Months of Inventory.

Condos have a bit more with 1.35 Months.

Everything is underpriced for a bidding war and everything is selling. We usually have around 11,000 homes for sale in September when looking back to 2018, 2019 averages, we currently have just over 4600.

This is a very tough environment for buyers but not impossible. Patience, focus and a good plan with a willingness to move fast when you find the right property are a must.

All slides can be found via Realosophy.com

As always if you have any questions or just want to talk Real Estate send me an email.