Sales were up 13.4% in August 2019 compared to August 2018. However, the average priced inched up a modest 3.6% to $792,611.
An increase in sales shows returning confidence in the real estate market, but you’ll notice if you look at my real estate stats that August 2019 sales were comparable to sales levels in 2014. That’s five years ago. Sure, they were up from 2018, but it’s not as busy as it was in 2015 and 2016.
If you’re looking to make a move this fall, this could actually be a good thing.
While sales are going up, active listings (the number of homes available for sale) are going down. In fact, August 2019 saw an 11.2% decrease in active listings compared to last year August. New listings dropped 3%.
It could be argued that August is typically a slow month, and usually activity tends to decline leading up to the fall season, an increase in sales amidst decreasing supply of houses means a sustainable growth in price.
We may not be seeing the double digit price growth that we’ve seen a few years ago (remember multiple offers and scarce supply?). But that could be a good thing if you want to make a move in the fall market.
For sellers, decreasing inventory means the ability to set and demand a decent price for your home — as long as you’re realistic and not drastically overpriced. It also means predictability in selling price, which would help you in your decision making when it comes to buying your next home as well.
For buyers, a modest price growth means you won’t be chasing runaway prices (in most parts of the GTA real estate market). In fact, you may even be able to negotiate well in neighbourhoods within the GTA that have seen prices cool down a bit. At the same time, a decent amount of homes available for sale gives you options to choose from.
Homes are selling quicker, with an average home selling in 25 days compared to 27 days last year. But something interesting to note — the Toronto Real Estate Board has started to release stats distinguishing ‘days on market’ for a listing versus ‘property days on market’ — meaning properties that are cancelled and re-listed will now carry the stat of how long it actually took to sell the home (if that sounds confusing, I’m going to go into more details on that in a future blog post so stay tuned).
A few more numbers to share with you. The entire TREB saw 2.4 months of inventory. Mississauga is sitting at 1.8 months, Toronto at 1.9 months and York Region… 3.9 months…. while Durham Region is sitting 2.3 months. Depending on where you want to buy (or where you’re selling), knowing these numbers along with other stats will help you figure out an appropriate pricing and marketing strategy. (Read the article about becoming a real estate market expert so you know what I’m referring to.)
I won’t make any predictions for the fall market (since I don’t usually make predictions anyway). But if we’re going to see the same pattern occurring as what we’ve seen this past year:
– We’re going to see steady price growth, which is healthy and sustainable for both buyers and sellers, and prices will skirt just above last year’s prices
– Confidence will continue in the market, especially after the upcoming federal election once we know what kind of government we have in place
– Sales will continue to rise, mind you because the base year of 2018 saw lower activity levels anyway (so no surprise there)
– Regardless of PDOM (property days on market) or LDOM (listing days on market), homes will sell quicker as demand picks up and supply steadily decreases
– Yes, fall sees a bump in inventory as more sellers come to the market, but on the other end, more buyers enter the market and the best we can hope for is more buyers acquiring homes than sellers listing them (which would lead to a steady increase in price)
Will strong sales growth and modest price growth continue into the fall? More than likely. Remember, interest rates have also remained steady, the government is introducing plans to help stimulate demand from first time buyers (and to get their votes…), and the economy is doing pretty okay. Let’s just hope this keeps going a bit longer.