I wanted to address some of the headlines we are seeing about the market stalling and slowing down. As major news institutions are putting out daily articles on everyone’s favourite topic – the real estate market, you have to take it all with a grain of salt. There isn’t necessarily new real estate information put out daily, so headlines can be made from embellished statistics. This month’s TREB market watch was unusually tricky to draw conclusions from since last April was so disrupted by COVID. Year-over year we saw a 362% increase in sales volume, new listings increase by 237%, and the average price increase by 33%.
This time the media looked at month-over-month stats instead of year-over-year in order to make sense of some of these numbers. They don’t typically do this, so some of the headlines aren’t accurately reporting what’s happening. So what are we actually seeing? This April had 4694 sales, which is the most sales of any April on record and the second highest of any month on record. It is however, down from the record sales we set just one month ago. We do, however, typically have seasonality with increasing sales from March to May. So yes, this month we are slower than a month ago with respect to sales volume, but we are still busier than any previous April. So while it’s technically slowing down, it’s still a very strong market.
New listings will help tell this story. We see the number of new listings come up a few hundred from March this year. So new listings grew while the number of sales decreased. Because of this, our sales-to-new listings ratio went from 71% in March to 63% in April. So again this is a drop and could be showing signs that the market has exhausted itself from the frenetic pace it’s been sprinting at. We are however, still very much in seller’s market territory (60% or higher is seller’s market and 40% or lower is a buyer’s market). So bottom line, not as strong of a month as March, but stronger than many other comparable Aprils.
Looking at the core market, detached homes sales are in-line with typical markets; however, we are suffering from a lack of supply. We are currently sitting at 0.9 months of inventory to be exact, which is dismal (a balanced market has 4 to 6 months of inventory and fewer than 4 months is considered a seller’s market). So this demand is putting a lot of upward pressure on price, with average beating out our 2017 price competitor from $2.170M to $2.324M. The higher end market, which was drastically impacted during COVID, has made a strong recovery.
Contrast this to condos in the core, where we hit a record for the number of sales and new listings compared to the last decade (the headlines are based on sales being down from March this year, while new listings have increased). Active listings remaining at the end of the month was average when compared to the last five years, but because of high demand and bustling sales activity, only 1.2 months of inventory remain. The average price was $817k, which is a new record for core condos. While we expected this to be up significantly from the crickets of April’s 2020, the bigger story here is that prices are up 20% over the last four months. This is the official signal of the return of the condo market (check out this blog on whether or not condos are still a good investment).
As always, if you have any questions or want some information specific to your home and your neighbourhood, please don’t hesitate to reach out. If you’re looking to buy or sell in the next year let’s grab a Zoom and strategize about the best approach for you.
Photo by AbsolutVision on Unsplash
