The Toronto Market? Never a Dull Moment!

This year has been quite the ride, whether you’ve been a Buyer waiting for the right opportunity to buy or a Seller wondering if your property will ever sell. Are you looking for some answers? You’re in the right place! Let’s dive in…

October was one of the busiest months of the year. Year-over-year sales were up by a whopping 44% for all market segments, and we’re starting to see month-over-month momentum carry over, which is promising news.

We saw the spring highs fall off throughout the summer with a pick up in the fall, which is typical, as is a dip in December, which happens every year. (So when the media jumps all over this and quotes that prices are down, remember, it indicates seasonality!)

Prices also increased for the second month in a row in Toronto for all home types except condos. But, the good news for the condo market is that sales have increased, which is a vital indicator of a resurging market, particularly with high inventory levels. As the condo market starts to move, we know there’s activity in all remaining segments as move-up buyers go into semis from condos and semis to detached. As we like to say…every $5,000,000 sale starts with an investor or entry-level condo somewhere along the line!

The sale/list ratio has been around 98.4% for the past four months. There are even some city pockets with multiple offers and bidding wars. Unfortunately, some Sellers are stuck in Feb. 2022 pricing and refuse to lower their prices. This thinking has severe repercussions now and in the future. As the old saying goes, you can lead a horse to water, but you can’t make him drink it.

New listings were down month over month, and this was the first time in 8 months that all property types had recorded a decrease in inventory. This indicates that the existing inventory will be scooped up as listings decrease due to the holidays and seasonality. Advice for overpriced Sellers? Reduce your prices now to take advantage of excellent opportunities with lessened competition. Remember, with fewer new listings, buyers work with the existing inventory, and another interest rate cut or two will prompt buyers who want to get ahead of the spring market to act now.

Here’s the thing, and it’s not brain science, LOL! If a property is priced well and presents well, there will be success. It’s that simple.

By far, the segment with the most inventory is still condominiums, with 4.7 months of inventory compared to 3.3% MOI for condo townhomes, 3.1% MOI for detached houses, 2.5% MOI for rowhouses, and 1.7% MOI for semi-detached properties. For the record, months of inventory means that if no properties were listed from today onward, it would take almost five months for all currently listed condos to be absorbed (sold).

So, is the worst behind us? There’s no definitive answer, and mixed positive and negative forces are at play. It will be interesting to see how current inventory is absorbed over the next two months. It’s fantastic that there’s finally been some momentum as a result of the larger rate cut of .50% in October to 3.75%, but with inflation up again, we don’t expect another .50% cut on December 11th at the next announcement.

For now, buyers remain selective and cautious while sellers are optimistic that things will improve moving into spring.

Never a dull moment!!