January’s GTA Real Estate numbers disappointed. There is no getting around that. However, I was encouraged by the way that the month ended. Offers were increasing in number and dollar amount. Buyer’s were returning and we were even seeing multiple offers in some markets.
It seemed that the bounce back was imminent.
And judging by how February went, that’s just what happened!
GTA
The average sales price rose by 8.0% from January to February, from $1,026,703 to $1,108,720. The underwhelming January numbers didn’t reflect that the month in fact felt very much like many of the months preceding it with a slight uptick in activity towards the end. It’s not the first time we’ve seen that the stats didn’t reflect the feel of the market.
But as January was bizarre, February was more inline with what we expected based on our observations of the market. Compared to February 2023 ($1,096,157), the average sales price was 1.1% higher in February of this year.
Overall since the market started to decrease from February until about June 2022, average sales price has stayed relatively stable. We had a brief uptick in prices in spring 2023 and a dead quiet rest of the year. Now that rates are being held steady and there are more rumblings about imminent decreases, buyer confidence has returned to a sleepy market. I believe that 2024 will continue to reflect higher year-over-year numbers as we move from month to month.
Total Sales
Sales continued to grow considerably. Last month’s growth was 22.6%, but from January to February, the percentage was +32.8% (4,223 to 5,607). When compared to February 2023, last month’s sales were 17.9% higher (4,754).
In terms of short-term future sales figures, I anticipate a continued rise for the next few months as listings also increase.
New Listings
New Listings continued to show positive signs, as 8,312 New Listings in January were easily eclipsed by the 11,396 in February. After the 113.9% increase from December to January, January to February resulted in a 37.1% growth of new homes on the market. As we look back to February 2023, last month’s new listings were 33.5% higher than the 8,537 for sale a year ago. This is welcome news given that a constant topic of conversation amongst agents is the lack of viable supply which is keeping many buyer’s from finding something worthy.
Active Listings
After the 2.7% decline in Active Listings from December to January, January to February grew 10.0% from 10,093 to 11,102. When February of 2023 is compared, last month is 15.1% higher than the 9,6430 recorded last year over the same month. If new listings are up 37.1% and active listings are only up 10% this is a good indication that a lot of supply is being absorbed and properties are selling reasonably well (as opposed to sitting like most of 2023).
Toronto
The City of Toronto’s average sales price also shot up, from $959,915 to $1,072,598, an 11.7% increase. Total sales moved up significantly from 1,472 in January to 1,971 in February, a big 33.9% leap.
New Listings in the 416 continued to excel, moving from 3,456 to 4,347 in February, a 25.7% rise. Active Listings inched up to 5,017 from 4,540 in January, a 10.5% upswing.
Looking at the Sales-to-New-Listings Ratio (SNLR) in the City of Toronto revealed a drop from 45.2% in January to 44.8% in February. As for the GTA, its SNLR also slightly decreased to 46.6% from 46.9%. This still keeps us in balanced market territory meaning that the power balance between sellers and buyers is relatively neutral. If you break this into condos vs freehold homes, we’re seeing a stronger seller’s market for homes (better time to sell and more competition when you buy) and a buyer’s market for condos (still a tricky time to sell and an abundance of opportunities to buy).
Outlook
The Bank of Canada has also announced that they are holding interest rates, waiting for inflation to drop further before decreasing rates. This move (or lack thereof) has reduced uncertainty in the market. More favourable coverage from the media have helped consumer confidence as well.
February numbers are the signal that the market bounce back has begun. Unlike last spring, there are many indications that this trend will continue throughout the rest of the year. With the weather warming up earlier than normal, I expect new listings to rise, competition to grow, and the average sales price to increase. While it is unlikely that we will see runaway prices in the short term, reasonable sales growth for this year seems quite likely.
