There were signs of momentum building in the real estate market in August as September approached. The sales numbers indicated an upward trend, so there was some optimism for September’s market report even though historically, it’s not a strong month.
Despite those positive signs in August, they disappeared in early September. And they have yet to resurface.
What happened?
While there were plenty of buyers looking for houses in September, there wasn’t much new inventory for them to see. What has also happened is that in many cases, the buyers aren’t putting their own houses up for sale until they find something to buy.
One can’t happen without the other.
So, we’re stuck. Demand now heavily outweighs supply, and it’s difficult to see what will spur a change to kickstart the market again.
GTA
The market report shows that this September was the second slowest such month since September of 2002 (yes, 20 years ago!). However, the average price of homes in the GTA actually increased for the second month in a row to $1,086,762 (a 0.7% increase).
Even with that increase, though, it’s a 4.3% drop from September 2021’s average price. That’s the first month to experience a drop, year-over-year, in 2022.
When you consider inventory, new listings actually rose by 6.6% to 11,237. That might sound encouraging, but when looking at Septembers of the past 20 years again, it’s also the second lowest. When comparing September of 2021, you’ll notice a drop of 16.7% in new listings. As a result of all of this, sales fell by 44% at 9,046 from 2021 to 5,038 in 2022.
Active listings grew slightly from August to September, to 13,534. But when compared to last year at this time, active listings are up a solid 47.3%. When relating that growth in active listings though, that’s down from 62.3% in August. This indicates that the new inventory that is out there is being purchased quickly.
But what about those thousands of properties that make up the available inventory? Many of them have been listed and then re-listed, but still at prices that don’t reflect the current market. These sellers are still hoping that they’ll be able to get those big February prices, but there aren’t buyers who will still pay those prices.
What does this mean?
To sum it up, September of 2022 revealed that there aren’t many sellers out there who have adjusted to the current market. For those that have, they can’t find something to buy that will create their need to sell their existing home.
What about October?
Early indications are that October is going to be a different month as it seems to be busier already. Many buyers may have wanted to wait and see what September brought before seriously entering the market. Now that we’re into October, buyers want to take concrete action before the colder weather starts.
What to do
Are you ready to enter the market? Or do you want some expert advice first? I’d be happy to help! Contact me and we’ll go through your approach and how best to handle your specific situation.
