A headline that screams DETACHED HOMES DOWN OVER $400K certainly grabs your attention but it is misleading when you are trying to get a sense of today’s housing market in Toronto. The devil is always in the details.
If you look a bit further about the screaming headline you discover that in July 2021 there were 32 sales over $4 Million, and in July 2022 there were 7 sales over $4 Million.
Now that I got the screaming headline out of my system, let’s look at the market where most of us live.
The questions that we get asked about lately is “Are we in a buyer’s market?” and “Should we wait to sell/or buy?”
There are three different kinds of markets, and it is measured by the sales-to-active listings ratio.
In a Seller's Market there are more people looking to buy then there are homes available. The sales-to-active listings ration is 20% or higher.
In a Buyer's Market there are more homes for sale than there are buyers. As a result, prices typically either decrease or increase at a pace below the average rate of inflation. The sales-to-active listings ratio dips below 12%.
A Balanced Market occurs when supply and demand are about the same, with home prices rising in line with long-term average rate of inflation. The sales-to-active listings ratio is between 12% and 20%.
According to the Toronto Regional Real Estate Board (TRREB) all signs indicate that we are still in a seller’s market in the home and condo market.
In home sales the average sales-to-active listing ratio for July 2022 is 41% compared to 2021 when it was 74%.
In condo sales the average sales-to-active listing ratio for July 2022 is 40% compared to 2021 when it was 61%
Market stats from TRREB from July 2022
Currently the average price of a detached home is $1,074,754 (July 2022) compared to $1,061,731 (July 2021). A year over year increase of 1.2 %. A very different headline, eh?
The average selling price of a condo is $767,999 (July 2022) compared
to $686,498 (July 2021). A year over year increase of 11. 8 % %
Should you buy or sell?
Where is the market heading? A crystal ball that can predict the future is something we all need but I will leave you with something to think about.
There is a housing shortage in Toronto.
Now that the world is returning to some semblance of normality from the impact of the pandemic, experts are predicting an acceleration of job creation and immigration will create the demand for more living accommodations.
While the inflation rate remains high experts are predicting that it has peaked for now.
The Bank of Canada is expected to raise interest rates another 0.5% to 1.0 % in the fall. While interest rates are the highest they have been in the last 10 years, they are still much lower than interest rates through the previous century.
The rental market cost for a one-bedroom unit is $2,269 a month (July 22) compared to $1,887 a month (July 2021), up 20%.
Any rental units that have come on the market since 2018 are not subject to rent controls. The landlord can raise the rent at any rate every 12 month.
The answer to whether to buy, sell or rent has a unique answer for everyone. With all the market data available through the multiple listing services (MLS) a good realtor can do a deep dive into what is happening in the region, neighbourhood and even street or condo building so you have the most relevant information on hand to help you and your family make the right choice for your next move in this changing market.
Sales Representative, SRES