Another record breaking month with staggering numbers… but who’s really counting anymore?
It finally happened. The average price for the Toronto region finally surpassed the $1M mark at $1,045,488. Although it’s not surprising that we broke the $1M price point, it is surprising that it happened in February. Not only were many savvy experts expecting this milestone later this year, but it also occurred in a stereotypically slower month on market.
This average price is 8% higher than only one month ago (Jan 2021 – 967k), and a whopping 14.9% higher than a year ago (Feb 2020 – 910k). Sales volume dramatically increased at 10,970 sales, which breaks a previous all-time February record in the low 8000s. Even pre-pandemic in February 2020 when the market was pretty hot (especially downtown) and we still had 52.2% more activity a year later.
Month-over-month, active listings increased significantly at 18%, as well as new listings at 60.5%. So although we are seeing supply, it doesn’t really feel like it since demand is so high. If demand and supply continue to trend in this direction, we will continue to see runaway prices.
Although it pre-dates the release of the February stats, even the largest doom and gloom skeptic of the housing market, the CMHC (Canadian Mortgage and Housing Corp), came around on their predictions. Back in May 2020, the CMHC predicted that amidst a COVID pandemic, Canadian housing prices would decline 9-18% and we would see a decline in sales volume in the 19-29% range. But we now know the market has excelled rather than weathered the storm of global and economic uncertainty. Although the CMHC has shared a rosier outlook on the market in 2021 as recently as January of this year, they postulated a worst-case scenario of a drop in housing prices by 50% by 2030.
So what does this mean? As demand continues to outpace supply, it’s not a fun time to be a buyer. Here in Ontario we are seeing this everywhere from Toronto proper to cottage country. So if you are in the market to buy a house, be prepared that it will take some perseverance. Set yourself apart where you can with large deposits, letters to the seller, no conditions, and flexible closings. While letters and deposits don’t always make a difference by any stretch, I had a situation this year where we had an identical price and closing and these two factors sealed the deal for us.
For the condo market in the core, the average sales price is still much lower than the previous year, with a 13% decline over the very hot condo market of Feb 2020. But the real story here is that volume of sales is up an unbelievable 80% year-over-year, so we are already seeing a recovery in terms of demand. Anecdotally competition has already returned with multiples and bully offers so prices are likely to follow suit. If you’ve been waiting for further dips in prices, you might already be too late.
For more info on what it costs to buy a home, check out this blog. And to set yourself up for success and take advantage of some lessons learned, look at this blog.
Photo by Joshua Newton on Unsplash
