Not surprisingly, December was the slowest month for home sales and for GTA home prices. As it was in November and over the previous few months though, the market has settled into some predictability. December did what we expected it to.
We’re now into a new year. Following the really high up, and then down that was 2022, what does 2023 bring to the real estate market?
What about interest rates? Will they be increased? Will they stay the same? Or will they be reduced?
Before we get into the new year, though, let’s sum up the last month of 2022.
GTA
Prices dropped to an average of $1,051,216 in December, the second consecutive monthly decline. This represented a 2.6% decrease. While the drop from October to November was only 0.9%, the bigger concern is that December’s average price was 9.2% lower than in December of 2021. Then, the average price was $1,157,837.
Total sales within December’s figures reveal only 3,117 houses sold. After 4,544 homes sold in November, that’s a decrease of 31.4%. Then, when comparing that number to December of 2021, the difference is much more significant: 6,013 homes were sold in that month, a 48.2% fall.
But, when comparing that fall to the year-over-year numbers for October and November, it’s a similar percentage drop (49.4% and 49.1% in November and October 2021 respectively). Again, we shouldn’t be surprised by these results.
Now, let’s talk about new listings.
New listings were down, which makes sense given the substantial decline in sales. While November saw 8,880 new listings, there were only 4,074 in the last month of 2022. That’s a 54.1% decrease. Comparing that number to December of 2021, the 4,074 was 21.3% lower than the 5,177 registered the year before.
Active listings also fell by 27% month-to-month, after the 8.5% fall from October to November. I can understand this too, as new listings fell more than the total number of sales. Month-over-month, active listings dropped to 8,692, from 11,910 in November.
The Sales-to-new-listings ratio (SNLR) also fell in December, from 50.7% in November to 49.2%.
Additionally, the months of inventory more than doubled from December 2021’s 0.9 months, to the 1.9-month duration of December 2022.
Another telling figure involves average sale price to list price ratio. The ratio was 98% in December, while a year ago we saw a 109% ratio (homes were being sold at 9% over asking).
Toronto
The average home price in the 416 dropped to $1,017,189 from $1,050,788 in November. 1,162 homes were sold, down 35% from the 1,798 homes sold in the same month of 2021.
The downward trend also continued in Toronto for SNLR: 51.9% in November to 50.1% last month.
Near Future
We’ve clearly seen a softening in the housing market. Some of it is due to the higher borrowing costs brought on by the rate hikes by the Bank of Canada, and some of it because of other inflationary pressures. In 2023, I’m expecting that we won’t see anything like the rate hikes we experienced in 2022. There may be a small hike in the future, or the Bank may decide to leave things as is because inflation seems to be slowing a little (fingers crossed!).
I don’t think we’ll fall below December 2022’s numbers, both in the GTA and in central Toronto. Demand for houses in the core should also outpace those in the GTA, moving that $1,017,189 above the GTA average price. I’ll have more on my thoughts for 2023 in a future blog.
Want to know what happened last January? Read this blog.
What to do
It’s a new year! Have your plans changed? Do you want to know what the market looks like in your particular area? Do you have an area that you’re interested in? I’d be happy to guide you through this landscape, working to get the best results for you. Send me an email and we’ll get started on an exciting 2023 for you!
