Here is my latest Toronto real estate market update for March 2019. In this month's report, I take a look at what's happening in the market right now, and what's on the horizon for the spring. In the thumbnail you'll see one of The Beach Winter Stations; come check them out before they leave at the end of the month.
How does this report affect your own situation? Need a professional guide to help you on your journey through the Toronto real estate market? Get in touch with me anytime at 416-357-1059.
Hi there, Rebecca Laing here with my Toronto real estate market update for March. It’s March Break this week, which is normally a quiet time in the market, especially when it’s capping off a sluggish and harsh winter. Although our most recent sales stats show some of the slowest number of sales in years, home values continue to modestly increase. As usual, some segments and neighbourhoods are running much hotter or cooler than others, and to highlight what’s hot, it’s a safe bet I’m going to pick on one of my favourite neighbourhoods, Leslieville. If you’ve seen a sold sign on a Leslieville semi in the past few weeks, stats show that it probably had multiple offers after a 7 to 8-day marketing period, and that it sold for 20% over the asking price. In these urban neighbourhoods with entry-priced homes, there’s still healthy buyer demand, resulting in these underpricing strategies continuing to yield success. Moving a bit further away from the core, into neighbourhoods like Cliffcrest, Humber Bay Shores, or even just East York, the holding back of offers in the hopes of igniting a bidding war is finding more mixed results, and sometimes disappointed sellers. It really takes careful analysis and skillful execution of your marketing strategy to sell both quickly, and for the top price, in these more variable neighbourhoods. At the higher end of the spectrum, The Globe and Mail recently ran a north vs south of the 401, Yonge corridor showdown. It focused on activity in the $2.5 million range, which is a price point that moves a bit slower no matter where in the GTA. Not at all surprising, the builder and speculator-laden Willowdale had a far greater selection of listings, with enough inventory on the market to easily carry 10 months of sales, almost 4 times longer than the midtown communities to the south. To be fair to Willowdale, the condo segment is still holding strong, with results that are largely consistent with the seller’s market for condos happening across the city. Travel a few more kilometres north across the border into York Region, and you’ll find the broadest swaths of sluggishness in the GTA, with activity levels coming into moderate buyer’s market territory for a number of communities. Returning back to the 416, let’s take a look at the key results from the last month. Total sales in the city of Toronto came in at 1879, down 7.3% compared to February of 2018. Fortunately, inventory levels are keeping to an appropriate level for the pace of sales. The ratio of sales to active listings, which gives months of inventory, is still hanging in at only 2.1, within a modest seller’s market territory, and even down slightly from the couple of months prior. In fact, buyers in a lot of categories are finding that the quality of selection is quite limited. Although it can be argued it’s a “which came first, the chicken or the egg” scenario, I'm of the mind that that if there was a bit more inventory in the right segments, we might see higher numbers of transactions. It’s also fair to put some blame on the lousy winter weather we had as being responsible for keeping some buyers in hibernation from the cold, and a few sellers from listing while dirty ice mounds were killing their homes’ curb appeal. Weather is an easy scapegoat for when businesses don't meet their sales forecasts, so while I would say it had an impact, it's not like we faced a continuous blizzard through February, so I'm not going to try to place full blame on our winter. Moving on to prices, detached homes across Toronto came in at an average sale price of $ 1,294,936 which is up 1% compared to last year. Meanwhile, the Home Price Index benchmark came in with a slightly smaller increase, up 0.5% over 2018. Either way, detached homes are holding value overall. As for semi-detached homes, the average was $1,087,363, up a healthy 10.3% vs. last year. It was a broad base of neighbourhoods responsible for this increase, so it’s pretty much been a good year to have owned a semi. Looking at condo townhouses in the 416, they came in at an average price $ $668,285, down 4.9% over last year. If you own a condo town, don’t panic, as this average price gets pulled up and down from month-to-month more than other segments. There just aren’t that many condo towns that get sold in any given month, which makes the average price more susceptible to being skewed by a few additional central neighbourhood luxury towns that happen to sell in a given month. Moving on to condo apartments, the average selling price was at $612,488, up 7.4% over last year. The HPI benchmark even came in a bit higher than this, showing an 8.7% increase. The downtown condo neighbourhoods of C1 and C8, which dominate the market headlines, came in with a benchmark increase of 10%, but it is actually a smattering of condo pockets in both the east and west districts that eked out a few additional points. In terms of what to watch for going forward, starting next week we should see an influx of new listings coming online, as the spring market kicks into gear. With hopefully improved weather and more inventory, there is apt to be more activity as buyers come out for the better homes that owners have held back from listing during the polar vortex. In this period from March to June, we typically see 40 to 45% of home sales for the entire year occurring in these 4 months. Because we also see a greater proportion of better quality and higher-end homes sold in this period, the average selling prices for the year tend to be pulled upward. These 2 reasons are why so much attention is paid to the spring market. On the economic side, it wasn’t long ago that further interest rate hikes seemed like a sure-thing. Now that the economy is teetering, signs are pointing towards prime rate stability for the rest of the year. On the fixed rate side, it wouldn’t surprise me if they trend down in these coming months as banks compete with each other for market share to make up for their decline in new mortgage originations. Whether its stable variable rates or a slight decline in fixed rates, both are supportive of a healthy spring market. More notable on the mortgage front are the increasing calls for changes to the OSFI’s expanded stress test that impacted a sizable chunk of buyers last year. Given that the OSFI is supposed to promote prudence in the banking industry while remaining independent of the government, it seems unlikely the agency will yield to these calls to cut or cancel the stress test. On the other hand, with this being an election year, the federal government is apt to do something that is perceived as supportive of the housing market, especially given the weakness in housing markets in other parts of the country. Longer amortizations may come up as the solution, which could very well offset the stress test, and pull buyers to spending more in the market. I would say that this is the action to watch for this from the feds, and if not, watch for campaign promises along the same lines from at least one of the opposition parties. And with that, I’m going to wrap things up for this month. As always, if you want to know more specifically about what is happening in your segment of the market, or if I can assist you in any way in making your next move into, around, or out of the city, please get in touch. You can reach me directly by phone or text at 416.357.1059, or online through rebeccalaing.ca. Bye for now, and have a great rest of March.