Toronto, Ontario, September 3, 2021 - “MarketWatch”, The Toronto Region Real Estate Board’s (TRREB’s] monthly stats report came out this morning. For all but sellers - and their agents - it’s not very pretty.
Overall, meaning all home types and all TRREB market areas, sales volume was down 19.9% to 8,596 homes reported sold via TRREB’s MLS® system. The average selling price of those sales was $1,070,911 for the month, up 12.6%.
While the challenges brought about by the frenzied market leading up to and including the Spring of ‘17 made that the “craziest market ever” in the minds of many, the current market has become almost infinitely more difficult and while some have proclaimed “the top is in” as average home prices backed off the pace of their rise, we’re not so sure. August is generally one of the slower months of the year as people turn their attention to the waning weeks of summer vacation, getting the kids set for back to school, and so on. That’s one of the “seasonalities” of the residential real estate market.
Inventory has been a major issue right to the point of being a central theme in the federal election platforms and it took another huge “hit” in August as Total Active Listings were down an unbelievable 50.8% versus last August. September and the fall market will tell…
As for August - yes - sales volume was off significantly year-over-year. But, with no inventory, it’s not hard to figure a major reason why. The obvious question is, “Is that the primary reason?”. And, yes - prices have put the purchase of a home in Toronto, The Greater Toronto Area, and many other areas out of the reach of many. But still, prices are rising across the board, particularly in the areas surrounding The Big Smoke. Condo apartments were the only group that saw an increase in sales volume. All figures quoted herein are year-over-year comparisons unless specifically noted otherwise.
Frustrated buyers. “Bidding wars”. Exasperated Buyer Agents. And I’ve seen on more than one occasion pointed jabs at Realtors® as the ones responsible for current price levels due largely to “scammy blind bidding wars.” That’s nothing short of ignorance of the law and, specifically in this case, Agency Law. It’s up to a seller to decide how they want their property marketed, and the agent has a fiduciary duty at law to the seller. It’s that simple. Call your MP if you want changes! It was actually proposed in the Federal Liberals’ platform, in fact, that the practice could be banned should they be re-elected. Are there some shady things going on? That’s difficult. to doubt. And to prove, unfortunately. Yes: Outlaw the blind bid option. But until that point, it’s up to the seller.
Detached Home sales fell 36.6% in Metro Toronto to 694 units at an average sell price of $1,674,641%, up 11.2%. The balance of the GTA, aka “The 905”, saw 3,010 sales of Detached homes reported, down 30.2%, at an average of $1,365,973, up 25.6%.
The other “freehold” [e.g. non-condominium] groups such as Semi-detached, Townhomes, etc., also saw significant drops in sales volume but increases in prices. Please see included charts for more detail.
The Condo Apartment sector saw 1,738 sales, up 13.2%, averaging $720,832, up 7.1% in T.O. and 806 units, up 7.5%, averaging $618,997, up 14.5% in the balance of the market area.
TRREB President Kevin Crigger: “The fact that new listings were at the lowest level for the past decade is alarming. It is clear that the supply of homes is not keeping pace with demand, and this situation will become worse once immigration into Canada resumes. The federal parties
vying for office in the upcoming federal election have all made housing supply and affordability a focal point. Working with provincial and municipal levels of government on solving supply-related issues is much more important to affordability than interfering with consumer choice during the home buying and selling offer process or revisiting demand-side policies that will at best have a short-term impact on market conditions."
TRREB Chief Market Analyst Jason Mercer: “Sales have accounted for a much higher share of new listings this year compared to last, and the story was no different in August. There has been no relief on the supply side for home buyers, in fact, competition between these buyers (has) increased. As we move toward 2022, expect market conditions to become tighter as population growth in the GTA starts to trend back to pre-COVID levels."
On that Inventory Front...
It’s been a problem for some time, and August saw that problem rise to a new extreme. Nearly fifty-one percent fewer homes available for sale. 8,201 Active Listings. Sounds like a lot - and the market’s actually been “tighter” in the not-so-recent past. But with monthly sales volume of 8,596 homes [Active Listings divided by the number of sales], that gives us an indicated “Forward Inventory” of less than a month. Low, low, low by historical standards. The “Absorption Rate” at which the market’s “absorbing” new inventory as solds [Sales divided by New Listings] was .81 as of month-end.
Not surprisingly, homes sold “5.3% more quickly” than last August at 16 “Listing Days on Market” versus 17.
Not entirely sure where summer went, but Happy Fall to all. Thanks as always for dropping by!
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