Greater Toronto, Ontario, May 5, 2021 - The Toronto Region Real Estate Board’s [TRREB] monthly MarketWatch residential statistical report was released by Board President Lisa Patel today confirming what virtually everyone paying any degree of attention had already figured out: The market’s on fire. A significant caveat is that the figures - almost always reported on a year-over-year basis which most accurately reflects seasonal fluctuations - compare to the first full month of the COVID-19 pandemic. While we have a better handle on coping with that pandemic now - even if still under significant restrictions - a year ago we really had few details of what we were dealing with pandemic-wise and the resultant fear caused the volume of home sales in Toronto and the GTA to tank 67% versus the prior April (though average prices stayed virtually unchanged over that period at $821,392, a rise of one-tenth of one percent from April, 2019).
So that raw fear has now been tempered to a large degree by knowledge and the taking of precautions as day-to-day life for many settled into a “new normal”... and the real estate market picked up where it left off - and then some. The March, 2021 numbers were very strong YoY. The April numbers were all but unbelievable.
The Bigger Picture
Realtors® in Toronto and the Greater Toronto Area reported 13,663 sales overall through TRREB’s MLS® system, meaning all home types across the Board’s entire market area. That’s a 362.1% increase YoY. Unbelievable.
The overall average sale price rose an even 33% to $1,090,992, holding that seven-figure mark for the third straight month after first crossing it in February. (January’s average was paltry $967,885, by the way). As noted above, due to the seasonal nature of residential real estate, all figures herein are year-over-year [YoY] comparisons unless otherwise noted.
That January stats post we had bylined “Are we there yet?”. That was a reference to the old saying, "When the average buyer can no longer afford the average home, a correction is inevitable." Apparently we weren’t there yet. Of course, there’s also the camp that believes this will run indefinitely as immigration ramps back up with the pandemic apparently receding combined with big money coming to our relatively safe haven from less calm parts of the world. Who knows? Maybe it’s as simple as Mark Twain explained: “Buy land - they’re not making it anymore.”
What’s interesting is that as strong as the April numbers were, they were actually down from the prior month: The March numbers overall were 15,652 sales [+97%] averaging $1,097,565 [+21.6%]. It’s very unusual to see softer numbers from March to April… then again, we live in interesting times…
On the Inventory Front
While there’s obviously pent-up buyer demand with the easing of pandemic fears, there are also a lot of sellers who waited for “safer” days. Hefty rises in the value of their asset didn’t hurt either. Of course, the buyer demand far outstripped that increase in inventory as evidenced by volume, prices and days-to-sell stats [more below]. Total Active Listings were up 10.5% to 11,668 at month-end. “New Listings” were up 237% YoY - again, out of touch with historical trends like some of the numbers above. But “reality bites”, as they say.
Putting those numbers into context, “Forward Inventory” tells us how much inventory we have in terms of the current rate of sales. It’s calculated by dividing “TAL/S”, or Total Active Listings over Sales for the months. That equals .854 of a month, or about 3.67 weeks. While historic norms run in the two-to-three month range for a balanced market, last April we were at 3 ½ months of Forward Inventory. Last month we were at less than three weeks so, while inventory has shown signs of easing slightly month-over-month, we’re still very solidly in a seller’s market. For now. Can the "temperature" of this market really be considered sustainable?
The Absorption Rate - the rate at which the market is “absorbing” new listings in the form of sales - is calculated as the month’s sales volume divided by the month’s newly listed homes and that stood at .656 at month-end.
The Major Home Types
In “The 416” - a.k.a. Metropolitan Toronto - 1,322 Detached homes were reported sold, up 326.5%, at an average sell price of $1,699,756, up 36.8%. In “The 905" - the balance of the GTA surrounding Metro T.O. - 5,194 “Detacheds” sold last month, up 376.1%, averaging $1,308,185, up an even forty-four percent. Unbelievable.
MLS®-listed Condo Apartment sales topped that Freehold [non-Condo] group on the rise in sales volume front, though lagged a bit on the price appreciation front… but sellers surely were not complaining: In Metro Toronto 2,277 units sold, up 373.4%, averaging $727,137, up 18.7%. The rest of the GTA saw 1,013 units sell, up 450.5%, at an average of $612,341, up 25.1%.
If you’re considering buying and/or selling a Bungalow in Toronto or the GTA, we have Bungalow-specific statistics posted monthly here, including links to archives if you’re interested.
TRREB Chief Market Analyst Jason Mercer: “Despite a modest slowing in market activity in April compared to March, selling prices for all major home types remained very high. Low borrowing costs during COVID-19 clearly had an impact on the demand for and price of ownership housing. While the pace of price growth could moderate in the coming months, home prices will likely continue on the upward trend. Renewed population growth over the next year coupled with a persistent lack of new inventory will underpin home price appreciation.”
TRREB President Lisa Patel: “While sales remained very strong last month, many REALTORS® noted a marked slowing in both the number of transactions and the number of new listings. It makes sense that we had a pullback in market activity compared to March. We’ve experienced a torrid pace of home sales since the summer of 2020 while seeing little in the way of population growth. We may be starting to exhaust the pool of potential buyers within the existing GTA population. Over the long term, sustained growth in sales requires sustained growth in population.”
Finally, not surprisingly given the sales and inventory figures, homes sold “47.4% faster” this April at 10 listing days on the market [LDoM] versus 19 days. The “PDoM” figure in the chart above is higher than that LDoM number since it takes into account prior listing of a given property, but only if those were with the same real estate brokerage. That stat does not take into account properties that were re-listed with a different broker which reduces its value as an analytical tool.
As always, thank-you for reading.
Browse GTA Bungalows by City / Region:
Browse "Beyond the GTA" Bungalows by City / Region:
Brant & Brantford Township | Dufferin County | Grey County | Guelph & Wellington County | Haldimand County | Haliburton County | Hamilton [City] | Hastings County | Kawartha Lakes | Kitchener-Waterloo & Cambridge | Muskoka District | Niagara Region | Northumberland County | Parry Sound District | Peterborough City & County | Prince Edward County