The Toronto Regional Real Estate Board recently released mid-month sales figures — a practice they have not done for several years. What’s the significance of this? ‘Real time’ market data has become in high demand as buyers and sellers and real estate agents try to make sense of the market amid the COVID-19 pandemic.
Sure, we can compare year over year figures on a monthly basis. But we’re only looking at two months worth of data so far: March, and April. The stats won’t be surprising. Demand is down. Supply is down. And prices remain somewhat stable for the time being.
Real estate sales prices are down only 1.5% when comparing the April 1 to 17 period in 2019 versus 2020.
Demand is down 69%.
Supply is down 63.7%.
This is an okay indicator about what’s happening with the overall market.
To look at what’s happening in the market right now, and for you to really gauge how much supply and demand there is, we have to start looking at the stats on a weekly basis.
Many Realtors will argue that it’s too minute (small) of a time period to look at, and it won’t show the greater trend that will emerge, but it does give some indication as to where the market is going over the next few weeks.
Yes — that’s right, weeks. Weeks is the time measure we are now using to look at listings and sales.
What we want to know is: have buyers and sellers adjusted to the current market conditions?
Are they coming together and transacting?
Have we reached the bottom?
Let’s look at some data to find out.
Here are the sales of freehold properties in the Greater Toronto Area (Durham, Halton, Peel, Toronto and York) over the past few weeks as reported on the Toronto Regional Real Estate Board:
March 1 to March 7 – 1,398
March 8 to March 14 – 1,530 (+9.4%)
March 15 to March 21 – 1,105 (-27.7%)
March 22 to March 28 – 648 (-41.3%)
March 29 to April 4 – 498 (-23.1%)
April 5 to April 11 – 374 (-24.8%)
April 12 to April 18 – 434 (+16%)
April 19 to April 25 – 417 (-3.9%)
We start to see an increase in sales during April 12 to 18, but it softens a slight bit the week after. Could this be the bottom, or is it too early to tell?
We would need to see several weeks of consistent increasing sales to know we’ve not only hit the bottom, but have started recovering again.
Now that we’ve covered the sales (demand) side, how does the listings (supply) side look? Are sellers putting their house on the market?
Here is what the freehold listing inventory looks like week by week so we can gauge the market’s supply:
March 1 to March 7 – 2,619
March 8 to March 14 – 2,674 (+2.1%)
March 15 to March 21 – 2,456 (-8.1%)
March 22 to March 28 – 1,602 (-34.7%)
March 29 to April 4 – 1,067 (-33.3%)
April 5 to April 11 – 960 (-10.0%)
April 12 to April 18 – 812 (-15.4%)
April 19 to April 25 – 813 (+0.1%)
The decline of new listings coming to the market have slowed over the past three weeks and saw a bit of a nudge upwards last week.
To really gain confidence on the supply side of the market, we need to see an increase in the number of listings being introduced on a weekly basis.
Sales prices remain stable (no significant increase or decrease) based on the mid-market stats.
With supply and demand almost jiving with each other (with the market seeing fewer sales and fewer listings), the number of houses for sale remain low relative to the amount of sales.
This doesn’t create equilibrium, but we’re not seeing a low number of sales with a high number of new listings which would cause a downward pressure on prices.
Some sellers are motivated and buyers taking an opportunity to negotiate may get a “deal” but right now this isn’t happening all over the marketplace.
Sellers are pricing well, buyers are accepting the value, and while prices have softened a bit, they have not dropped significantly.
Let’s look at how the condo market on the GTA is doing.
Here are the recorded condo sales over the past few weeks:
March 1 to March 7 – 818
March 8 to March 14 – 806 (-1.4%)
March 15 to March 21 – 578 (-28.2%)
March 22 to March 28 – 404 (-30.1%)
March 29 to April 4 – 260 (-35.6%)
April 5 to April 11 – 184 (-29.2%)
April 12 to April 18 – 194 (+5.4%)
April 19 to April 25 – 147 (-24.2%)
After weeks of declines, we notice a slight upward bump in condo sales during the week of April 12 to 18, interestingly similar to the increase in sales of freehold properties.
The following week, we see an almost 25% decline in condo sales.
That seems like a pretty sharp decline, and too much of a drop to really call the bottom on sales.
Let’s see how the supply side of the equation looks for condos:
March 1 to March 7 – 1,223
March 8 to March 14 – 1,305 (+6.7%)
March 15 to March 21 – 1,251(-4.1%)
March 22 to March 28 – 778 (-37.8%)
March 29 to April 4 – 629 (-19.1%)
April 5 to April 11 – 575 (-8.5%)
April 12 to April 18 – 506 (-12.0%)
April 19 to April 25 – 477 (-5.7%)
We’re still seeing slight declines in new condo listings coming to the market week after week. Restrictions placed on some condos pertaining to outside visitors could be one of the reasons.
If the number of new condo listings continue to decline as sales remain stable, condo prices will not decline significantly.
But — if condo sales continue to drop while new condo listings remain constant, you’ll see a downward pressure in price as supply starts to outpace demand.
The next few weeks will determine where the market is headed.
Did we see the bottom?
Is this just a bounce before we really start to see where the market is headed?