After a surprising drop in the average home price in Toronto and the GTA from December to January, prices seem to have normalised. The transition from the first month of 2023 to the second resulted in a 5.5% increase in home price in the GTA ($1,095,617).
This means that we might be returning to a seller’s market. Which, for the last two decades, has been our normal.
Obviously this isn’t the situation that buyers were hoping for, especially if they were holding out for continued decreases. But this is where we are and could continue as we head into the spring market.
What is also up is demand. And when that demand is combined with a lack of supply, prices rise.
That lack of supply is illustrated by a meagre 12.3% increase in listings from January to February. Combine that with a 54.3% growth in sales, and it’s evident that more properties are being scooped up and there would be more home purchases if the inventory was there.
4,783 GTA homes were sold in February, down a massive 47% from that peak of February 2022 (not a surprise but included for comparison purposes). In terms of new listings related to last February, that number was down 40.9% at 8,367 homes on the market.
Toronto
From January to February, the average home price in the 416 went up by 8.4% ($1,071,043). With the dearth of listings and increased competition, we could see a stable rise through the next couple of months.
There were 3,314 new listings in February, while active listings came in at 4,110. The Sales-to-New-Listings Ratio (SNLR) ratio fell to 46.8%, down from 48.1% in January which is still in balanced market territory.
March 2023 State of the Market
As much as buyers would like to believe that the market might decline, I’d be hesitant to bet on it. There are just too many factors at play such as the direction of interest rate trends in flux, the continued talk of a recession, the stagnant wage growth and the unprecedented lack of viable supply. Evidence from the last two decades still indicates that buyers should expect home prices to seasonally rise for the next six months. And with Ipsos polling showing that there is increased interest in buying a home, expect more competition in the buyer’s market. In our recent blog we reviewed some of the major factors expected to impact the market in 2023.
We’re here to help you build wealth and navigate the market. If you’d like to chat more about how this information applies to your situation, connect with us via email (hillary@hillarylane.ca) or phone (416-882-4707) anytime.
Photo by Glen Carrie on Unsplash
