August 2023 Market Report – The Slow Summer
A small drop in the average price of real estate during the summer is normal. And expected. But what we experienced last month in the GTA was a bit atypical.
The average sale price dropped quite a bit, from $1,182,120 in June to $1,118,374 in July. This drop of 5.4% is higher than a typical fall of 3-4% over the summer months.
The $1,118,374 average sales price is still 4.2% higher than in July of 2022, and the 5,250 homes sold represent a 7.8% increase from last July.
So, while we had that dip in July, the overall annual trend is still positive.
Coinciding with the seasonal fall in price and total sales, new listings fell by 13.6% to 13,712 from 15,865. In July of 2022, there were only 12,294 new listings, so again, positive numbers over a year ago.
Another piece of good news is that inventory is on the rise as Active listings increased by a substantial 18.9% with 14,107 homes on the market in July.
The 416’s average price also fell from June to July, from $1,152,424 to $1,066,184. Relatedly, total sales also experienced a large decline from 2,833 in June to 1,886 in July.
New listings in the City of Toronto dropped to 5,117 from 5,789, but just as in the GTA, Active listings grew; to 6,059 from 5,521.
The Sales-to-New-Listings Ratio (SNLR) was down across the GTA for the first time since February. The GTA’s SNLR moved down a full percent to 51.5%; the 416’s SNLR fell below 50% to 49.7%.
For the rest of the summer, look for a slow August and early September. It could even be slower than July. And it could possibly be a record-breaking lull in the market as back-to-school looms. Or if rates stabilize and the interest we saw this spring returns, we could have a healthy Fall market.
But just as I mentioned last month, the long-term outlook is important when considering your strategy. Because as we hit the middle of next month, interest rates should have normalized (although some are predicting further hikes), and buyers should have adjusted accordingly.
The key lies with the sellers. Supply has been low despite rate hikes which has allowed buyer demand to steadily build over time. If sellers return to the market and inspiring inventory entices buyers back to the table, we will have a very hot fall market in the GTA. At this point several institutions have predicted a stable fall and market frenzy in 2024.
While July’s results were more severe than typical for this time of year, prices did not overreact to the 2 rate hikes this spring/summer like they did last year. Overall I’m still optimistic that it’s just a slower-than-usual summer for real estate sales and folks took their much needed summer breaks earlier this year. We shall see if the positive real estate sales trend will resume once back-to-school hits, demand increases, and fall approaches or the rush will be kept at bay until next year.
Thinking of moving to the next stage? Let’s chat. Send me an email (firstname.lastname@example.org) or text/phone (416-882-4707).
Photo by Pascal Debrunner on Unsplash