Transactions have increased month-over-month with average sale price ticking upwards for the first time in a year
Several weeks back, when I first wrote that my colleagues and I were starting to see some undeniable signs of life returning to the Toronto real estate market, it was hard to believe what I was seeing, let alone saying.
At that point, it was noteworthy to see, but such cases by and large felt like wild outliers — the market was still pretty quiet and mostly depressing. Few transactions, prices holding firm enough to keep affordability at bay, everything on pause.
But in the weeks that followed, particularly in the recent days following March break, the true starting point of the spring market, a pattern emerged. Anything halfway decent, priced reasonably close to market value, was drawing buyers out off of the sidelines.
If someone had told me a year ago that we could see this kind of action at these kind of price points with interest rates on the other side of 5%, I would have struggled to believe it.
While the year-over-year data clearly paints a picture of a sharp market correction over the past twelve months with sales down 36.5% and average price down 14.6% from March 2022, this is not news — what’s noteworthy is seeing that transactions have increased month-over-month, and average sale price, now at $1,108,606 is trending upwards both on an actual and a seasonally-adjusted basis.
New listings are up, average days on market has decreased, list-to-sale ratio is up — all signifiers that something has shifted and the market has come back to life.
Uncertainty decimated it all.
This has to be something more. Even if it’s still virtually unrecognizable from what we might historically expect to see in a typical March market.
Could it be that we are looking at a spring market further compounded by pent-up demand? We already saw how impactful just three months of lockdown was to bottle-up demand and drive market activity that first COVID summer. Now, how about a year?
Will there be sellers who have spent the last year feeling like they missed their shot to cash out feeling like now is the time? An increase in inventory would do a lot to unlock the chessboard.
For my clients who have properties they want or need to sell but thought they would wait until the fall, my advice to them is almost invariably not to wait. If momentum has returned, let’s catch the wave. Sure, buyer confidence seems to have improved, but markets are volatile — there are multiple factors impacting the world and the economy that could interrupt this upswing.
The question will be is this a blip of momentum that will fizzle or has the tide turned?
My prediction: market activity will increase while prices grind sideways straight into a quiet summer. For prices to tick meaningfully upwards again, rates will need to come down. For now, all we should be hoping for is an increase in sales.
What a difference a year makes.
