Sales on TRREB for February were 4,783. That is down 47% from February of 2022 but up 55% from January. In 2022, the January to February uptake was 61% or very similar. Month to month comparisons are more important because cyclical changes are more critical than seasonal at this time. So, when will year over year comparisons become meaningful? Look to April or May. The Media discussion then will not be about sales and price drops but rather how the market has bounced back.
Yes, sales were lower than normal, but ‘new’ listings were down by 41% in February too. The result is prices have stabilized at these lower levels. Going forward we will see who will blink first. Will owners be forced to sell and bring more listings to market; or will potential buyers who must move to accommodate lifestyle changes create an increase in demand? Early results for March suggest that buyers who once only bought ‘move in ready’ units are also re-entering the ‘fixer upper’ market because of a lack of listings.
In last month’s Market Report, we compared the drop in prices over the past 12 months for low rise and condos across the 416 and 905 areas. The price drops ranged from 20+% to a low of 3.4% for 416 condos. This month we looked at the change in condo prices in the Downtown and Humber Bay markets over the past 12 months by number of condo bedrooms.
The one-bedroom units decreased the most in price by $100,000. The larger units dropped very little. When Covid hit, people in smaller units moved out to the suburbs and beyond. Tenants were the first to leave. Owners and investors (because of vacancies) of these smaller units also decided to sell. Owners in larger units for the most part decided to stay, and prices held firm.
With people moving back into the City and with rents rising, we expect condo prices will slowly increase from these levels.
The Silicon Valley Bank failure will cause the U.S. Fed to pause all bank rate increases in the short term (and the Bank of Canada will continue to pause). Look for mortgage rates to slowly trend down as we head into the summer.
We have reached the bottom of the real estate market for the City of Toronto. The farther outside Toronto, the longer it will take to reach the bottom.
