March, 2019

Toronto Real Estate Market Update – February 2019

February results were expected to continue what we saw in the first month of 2019 — modest growth in sales and average sale prices. That didn’t materialize. I have generally not regarded the weather as having a material impact on the residential resale market, but this February may be the exception.

This February we saw a modest decline in sales compared to February last year. This year 5,025 properties were reported sold, a small decline of 2.4 percent compared to the 5,148 properties reported sold in February 2018. The reason for this decline, particularly in the 416 regions, was simply due to a lack of inventory. Since January saw a year-over-year increase in supply, the only plausible explanation is the weather. February brought three major snow storms, and effectively paralyzing the greater Toronto area on three different occasions, with snow mounting to shocking levels. It is not surprising that properties did not come to the market.

In February only 9,828 properties came to market, 6 percent less compared to the 10,473 that became available least year. Even the 10,473 properties that became available last year were insufficient to meet demand. Consequently, as we enter March, we are marginally lower than the properties available to buyers last year, and most of the properties are in the 905 regions of the greater Toronto area. Of the 13,284 properties available for sale, 70 percent of them, or 9,352, are located in the 905 regions.

It is clear that demand is present and because of supply shortages it is beginning to pent up. In February the properties that sold caused the average sale price to increase for the second month in a row. All properties sold for $780,000 in February, almost 2 percent higher then last February’s sale price of $767,000.

In the City of Toronto, the average sale price increased dramatically to $840,000 (a price which includes all condominium apartment sales), at least 10 percent more than the average sale price in the 905 regions. The clearest example of both the supply shortages and the impact on average sale prices is February’s average sale price for semi-detached property in the City of Toronto. In February the average sale price came in at a shocking $1,087,363. Semi-detached property sales only exceeded $1 Million during the frenetic increase in prices in late 2016 and the early months of 2017.

The length of time that properties spent on the market also demonstrates how strong the City of Toronto’s resale market continues to be. In February all properties available for sale in the greater Toronto marketplace sold in only 25 days. In the City of Toronto sales happened at a lightning speed of 22 days. Semi-Detached properties both in the 905 regions and the City of Toronto sold even faster – 18 and 15 days, respectively. What is astounding and further proof that supply is insufficient to meet demand, is that all semi-detached properties sold for more than their asking price. At 102 percent in the 905 regions and at 106 percent in the City of Toronto.

It is concerning that the last truly affordable housing type, condominium apartments, is rapidly becoming unaffordable. In February all condominium apartments sold in the City of Toronto (on average) for $612,000. In Toronto’s central districts, where most condominium apartment sales take place, the average sale price came dangerously close to $700,000. With the increase in mortgage interest rates and the implementation of mortgage stress testing, these prices are making it very difficult for first time buyers to enter Toronto’s real estate market.

At the other end of the real estate spectrum, higher end property sales continue to strengthen. In February 118 properties having a sale price of $2 Million or more were reported sold. This compares favorably to the 126 sold last year. It is interesting to note that condominium apartments accounted for almost 10 percent of sales in this price category.

As we move into March and improving weather conditions, we anticipate more properties coming to the market to meet demand. It would appear that buyers have accepted higher interest rates and mortgage stress testing but are frustrated by their inability to find suitable properties for sale, especially semi-detached properties in the City of Toronto.

Collingwood Real Estate Market Update – February 2019

The average sale price for the Western Region was $508,899, up 9.3% from February 2018. With inventory across the region remaining at near historic lows, combined with the ongoing population growth in the area, prices have continued to increase over the past 10 years. New listings were down 5.1%, with 188 residential properties coming to market in February 2019 vs 198 last February. Active listings were up 16.2% year over year with 496 properties available in February 2019 vs 427 in February 2018. Sales showed a significant increase of 29.1%, with 111 sales reported in February 2019 compared to 86 last February.

February 2019 reported 4.5 Months of Inventory (MOI) down from 5.0 months for February 2018. An MOI under 5 months is considered a Seller’s market, meaning less supply available, creating tighter market conditions. With the snow and ice melting away and Spring right around the corner, more Sellers will likely be ready to bring their homes to market offering patient Buyers more choices.

PEC Real Estate Market Update – February 2019

Based upon the statistics released by the Quinte & District Association of Realtors® (“the Quinte Board”), the pace of activity in the Prince Edward County (“the County”) real estate market slowed somewhat over the month of February. The potential reasons for this pause are twofold. First, the County was pounded by a series of particularly brutal storms over the last month which have made travel to and throughout the County challenging at best. Bluntly put, just about everything has been covered by a thick blanket of snow and coated by an intimidating sheet of ice, which has undoubtedly impeded the ability of potential buyers to get into and properly inspect the properties in which they may be interested. In addition to that, those actively involved in the market have been consistently frustrated by the shortage of good property stock, which has been further compounded by the limited number of new listings coming onto the market. Perhaps with the forecasted thaw, and impending spring conditions, sellers will be encouraged to put their properties on the market, and buyers will be able, and feel more inclined to venture out and see them.

Specifically, according to the Quinte Board, only 24 properties sold in the month of February across the wards that make up the County. That is over 35% fewer than sold the year previous when 37 properties were recorded as sold, and is 10 fewer than sold in January, 2019. Year to date, 58 properties have changed hands in the County, marking a 4% increase over the 56 sales logged last year by this time.

As indicated, however, the number of new listings are flat. Only 53 new properties came onto the market which is the same as the year previous when the market was already tight. Year to date new listings lag last year’s numbers by 15% with only 140 new properties being listed in total thus far in 2019 compared to 165 one year ago.

It is interesting to note that those properties that did sell in the County during the month of February, did so at a premium. The Quinte Board calculated the average sale price of properties this month at $502,953. This impressive benchmark exceeds last year’s figure ($392,059) by over $100,000 and marks a year over year increase of over 28%. As indicated in earlier reports, due to the smaller sample pool from which these figures are derived, real estate statistics for the County are subject to more volatile swings as they are inevitably more influenced by the particular cross-section of properties that sell at any particular time. Having said that, they still provide some insight into the trends and trajectory of the market, which in the case of price, has been a relentless surge upwards over the last few years. Consistent with this, the median sales price for the County came in at $512,000, which amounts to a whopping 60% year over year increase from $373,500 in February 2018.

Buyers did take longer to locate, settle on, and secure their properties of choice, as the average days on market for properties that sold in February went up from 68 to 99, which is an increase of almost 46%. This could be a factor of a number of things including: sellers being tenacious about their selling price and forcing buyers to deliberate longer before being able to confidently proceed with an offer; buyers taking longer to find exactly what they were looking for; or as stated, the particularly inclement weather confronting all players in the County real estate market in February.

And finally, while they may not necessarily reflect the properties or price points that buyers are interested in or looking for, there are in fact more properties on the market this year than last. At months end, 402 properties were listed for sale, while according to the Quinte Board, there were only 249 the year previous at that time.

The prospect of warming temperatures and the advent of spring should usher in new market conditions for the County. Hopefully, it will prompt sellers to list their properties for sale with the knowledge that the attributes of their property can be more favourably showcased, and the belief that buyers will be more inclined to venture out and appreciate them. Generally, market conditions seem to be stabilizing with a return to a more sustainable pace, but recent price trends suggest that, despite its ongoing relative competitive price advantage, the County is not immune from the affordability challenges now confronting many buyers grappling with higher debt loads, carrying costs, and the more stringent lending criteria imposed by the stress test.