That would be the simplest way to describe how the Toronto real estate market fared in the month of November, based on stats released last week by the Toronto Regional Real Estate Board in their Market Watch report.
“High borrowing costs and uncertain economic conditions continued to weigh on Greater Toronto Area (GTA) home sales in November 2023. Sales were down on a year-over-year basis, while listings were up from last year’s trough in supply. With more choice in the market, selling prices remained basically flat year-over-year.”
With 4,236 sales reported on MLS, transactions fell 6% from last year while inventory increased by 16.5%. Prices mostly ground sideways with an average selling price of $1,082,179 which, when seasonally adjusted, represents a 2.2% decline month-over-month.
“Home prices have adjusted from their peak in response to higher borrowing costs. This has provided some relief for buyers, from an affordability perspective. As mortgage rates trend lower next year and the population continues to grow at a record pace, expect demand to increase relative to supply. This will eventually lead to renewed growth in home prices,” said TRREB Chief Market Analyst Jason Mercer.
As someone out there watching what’s going on, that picture may feel a bit rosy. The reality is that prices are absolutely coming down out there. In some cases, shockingly – with some recent sales of good properties in good neighbourhoods (that would have been a bun fight jut 18 months ago) coming in at pre-pandemic prices.
But this is to be expected.
As much as we can talk about the resilience of a market place, there are living, breathing humans behind these transactions and the reality is that many of those with properties to sell right now have motivations that are incompatible with a watch and wait approach – they need to meet buyers where they are.
And where that is, is grappling with inflation, elevated borrowing costs, and record unaffordability.
With so few truly engaged buyers out there resulting in so few showings and so few purchases, if a seller needs to sell they need to price accordingly or, at the very least, be willing to listen when the market speaks. Thus, some of the sale prices we are seeing.
More broadly, however, sellers aren’t slashing their asking prices, particularly with conjecture ramping up that interest rates may start to come down sooner than later. We already saw the impacts of fixed rates with a 4 out front last spring; the market went wild. As long as there is a belief that we could see a repeat performance in the new year, sellers will not feel any particular motivation to adjust their expectations and drop their prices.
And so the stalemate continues.
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