February 7, 2018 | Market Update
2017’s record-breaking January stays on top
This January was nothing to sneeze at – but it wasn’t quite enough to unseat 2017’s January as one of the busiest sales months ever.
That isn’t to say that this January had nothing going for it. More than 8,500 new listings were added to MLS last month. That’s a listing added every 5 minutes for the entire month!
But it didn’t quite add up to the transactional history of 2017. GTA Realtors reported just over 4,000 residential transactions in January, in comparison to 5,100 a year ago. It looks like January 2017 will stay on top as one of the busiest months for residential sales for a while longer.
Still, the beginning of 2018 has shown to be quite a busy one, and we’re already ramping up for summer. Toronto Real Estate Board President Tim Syranos says, “As we move throughout the year, expect the pace of home sales to pick up.” Looks like January is indicative of a busy year to come.
Longer days on market, more active listings
With more listings being added to the market but fewer buyers coming out to snap them up, we’re seeing the average days-on-market stretch from its previous record-lows. January listings sat on the market for about 32 days in the GTA, and 28 in the City of Toronto. Last year, those numbers were 19 days for the GTA, and 20 for the City of Toronto.
That means the sales process is a little longer for sellers, and they might need to start planning accordingly. But buyers can breathe a little easier knowing they have a tiny bit of extra time to get their offers in.
It’s also good news for buyers looking to score a specific kind of home. More active listings means buyers have more time to comparison shop. After years of no-inspections and as-is clauses, we’re glad to see buyers get the good end of the stick for once.
Condos aren’t king, but neither are houses
Anecdotally, we’ve noticed a speed up in buyer interest in condos. Multiple offer scenarios are still common for hotter listings in the downtown core, and showing attendance has ramped up as well.
But January’s data shows that condos, detached houses, and townhouses seem to be equally desirable to buyers.
All home types throughout the GTA and the City of Toronto sold for 100% of their listing prices (within a few percentage points) and were sold in 29-34 days. The numbers waver depending on neighbourhood, but the averages show a steady and similar rate across all housing types.
This is the closest we’ve seen condos, detached houses, and townhouses come to being equally sought-after in the GTA, after a few years of a seemingly unquenchable appetite for detached houses in popular areas.
But prices show the disparity between types of homes
Our anecdotal observations of busier condo activity weren’t wrong – the market has absolutely sped up for condos.
The year-over-year percent change in sale price jumped by almost 15% for condos, while detached houses dropped by 9%. Interestingly, prices for semi-detached homes and townhouses each dropped by less than 2% (-1.8% and -0.5%, respectively).
Whether it’s the even-tighter rental market that’s leading to more investor activity, or the affordability factor for first- and second-time homebuyers, condos seem to be an extra-hot commodity in GTA real estate right now.
Over the last few months we’ve seen that landlords are easily covering their carrying costs in top areas, and a scarce amount of entry-level housing all over the city lead condos to be Fair Housing Plan-proof, so this is on-trend. But the days-on-market and sale-to-list-price show that they’re not quite overtaking detached housing in desirability.
So what do the days-on-market spread and similar sale-price-to-list-price ratio actually mean? In all honestly, it’s that Realtors know what they’re doing with condos.
Behind almost every buyer and seller in the GTA is a Realtor. Realtors in Toronto don’t seem to be over- or under-pricing their listings in comparison to what the market will actually pay, which leads to a healthier and more balanced market. It also means that it’s best to use a Realtor who knows Toronto’s historic rollercoaster ride or a market, and one that ensures you the best price.