GTA real estate agents reported a total of 87,825 sales in 2019, up significantly from 2018’s 78,015 sales. That’s an increase of 12.6%. The reason is simple. More sellers have become realistic with their selling price expectations and have adjusted their previously lofty asking prices to sale-able levels. And buyers have become more confident and realized they can’t wait around forever.
The result: in December, the number of property available for purchase has significantly decreased, average price saw a double digit increase, and we’re starting the year off with a surge in sales.
Multiple offers are happening… in early January. Not enough sellers are bringing their homes on the market. And months-of-inventory, a key indicator on where prices could be headed, is dropping rapidly.
We will see market activity ramp up before the spring market. But it won’t be a repeat of 2017 shenanigans. However, we may start to see prices come closer to peak 2017. This time around it’ll be a steady growth.
One of the questions I get asked a lot is: do I list and sell my home now, in the middle of winter, or should I wait until the weather gets better… closer to the spring market?
The answer depends on what you intend to do. Are you planning to sell and then buy? Or are you moving out of the city? Are you going to rent? Perhaps retire out of the country or travel?
Your motivation to sell your home will determine when you need to sell it. If you’re in the market to buy a home right now, and you sell in the same time period, you’ll be transacting in a market where the price for both your sale and your purchase reflect current conditions. Simply put: you’ll be fine if you’re buying and selling in the same market.
Think about it this way. If you wait until the spring, and let’s say demand surges along with prices, sure you’ll get more money for your house… but what will you pay for the home you’re buying next? It will also go up in value due to the same demand that caused your house to sell for higher.
Whenever you’re buying and selling in the same market, you’ll be fine. Just make sure your real estate broker explains the market situation and what will affect the value of your home.
How will the 2020 real estate market look like? Well, I wish I had a crystal ball. (Next month, by the way, the Toronto Real Estate Board is holding their annual economic and market outlook — so I’ll share their predictions with you at that time.)
Generally speaking it’ll be better than 2019. Sales will be higher. The average price will continue to inch upwards. We’ll see steady growth. And inventory will tighten due to increased confidence and home buying demand.
When you look at the historical average price increase year to year since 1972, the cumulative average in the GTA is 7.49% once you factor in 2019’s prices. Keeping in mind that we saw a 17.31% increase in 2016 and 12.71% in 2017… then a drop of 4.29% in 2018 and a modest upward movement of 4.07% in 2019, GTA real estate prices have progressed at a conservative rate.
The price growth we saw in 2019 is similar to a decade ago when in 2009 prices rose up 4.25% after the 2008 financial crisis that affected our market a tad bit. Perhaps we’ll see a 6-8% increase in the year to come, fuelled by stability and an increasing appetite in real estate.
But time will tell!