Are people buying homes right now? Are sellers getting the price they want? What direction is our market headed in? These are the questions I hear a lot lately. People want to know what kind of activity is going on in the market.
Perhaps they have plans to buy and want to see what everyone else is doing.
Or they’re thinking about selling but not sure if now is the time to do it.
Next week, my office is opening its doors with an extremely cautious approach. Masks have to be worn by agents and clients in the office. Physical distancing must be practiced. Office meetings will continue to be virtual. Agents are excited.
Yesterday, as I was driving home from the office on the 401, I was faced with the usual highway nuance: traffic. Normally it would take me around 25 minutes to get home. Yesterday it took almost 40 minutes.
Businesses are re-opening. People are out and about. Even the cemetery I pass by on my way home had a lineup of cars waiting to get in, and a masked attendant motioning people through.
Things are starting to happen again.
When we look at the real estate market, we also see momentum increasing.
Since the beginning of the provincial lockdown, my colleagues and I have been monitoring activity on a weekly activity.
This is not a normal thing to do, considering real estate statistics are released by the Toronto Regional Real Estate Board on a monthly basis. A few years ago they even stopped producing mid-month stats, only to re-introduce it just last month.
With the tools we have available in real estate today, we’re able to keep a pulse on the market much more effectively. We can gauge what buyers and sellers are up to. And where the market is going.
One of the tools my brokerage uses is “Broker Bay.” This tool keeps track of listings, appointments, and offers, giving agents (and our clients) a way to study how the market is doing.
Here are a few questions I’m going to answer in today’s blog post:
1. How much market activity is happening now versus when the COVID-19 pandemic forced a provincial lockdown almost two months ago?
2. Are buyers looking at houses, and making offers?
3. Are more sellers listing their homes on the market?
4. Are houses selling in today’s market?
Let’s look at some pretty charts provided by Broker Bay to find out.
The first chart we see illustrates showings and offers in the Greater Toronto Area over the last 90 days. Broker Bay’s statistical capabilities allows it to collect data on the total number of showings its brokerage network’s listings received, and how many offers were registered.
There’s no surprise that showings and offers dipped around March 15 when the provincial lockdown commenced.
What you see on the graph is a steady increase, week after week, of showings — and, subsequently, an increase in offers.
The dips you notice on the chart correspond with the weekends, with the most recent weekend being Mother’s Day. Showing activity tends to drop on the weekend, and then pick up again as the weekdays begin.
An increasing number of showings quite simply means buyers are out there looking at houses again. We’ll see showings increase more and more in the coming weeks and months.
More offers means buyers are confident enough in the market that they’re making offers on the homes they want to buy. This will result in an increase in sales.
When we look at just the past 30 days of market activity, we can also investigate how many new MLS and exclusive listings are being introduced to the market, and gauge the number of sales.
We notice on this chart that with each passing week, the number of new listings (market supply) is increasing.
The number of sales remains steady on a week to week basis.
How much market activity is happening now versus when the lockdown commenced almost two months ago?
There is more market activity (showings and offers) happening now than when the lockdown began. This is a positive sign, as long as the trend continues upwards.
Next, let’s look at the number of showings so far in May versus the same period in April.
There’s no surprise that there’s more showings happening now than last month.
Where fear and uncertainty were present during the weeks after the lockdown began, buyers have now become more confident not only with the real estate market, but with the process of buying amidst the global pandemic. With safety protocols in place, they’re out there looking for homes to buy.
Showings should continue to increase, week after week, provided the current momentum continues to follow the emerging trend.
Showings are up 149% month over month, with a 158% increase in offers being registered on homes listed for sale.
Buyers are looking at houses, and making offers.
Let’s look at the next set of stats: listings and sales.
In the first full week of may, we saw a 38.2% increase in new listings introduced to the MLS, and a 72.4% increase in sales compared to the first week of April.
Sellers are listing in today’s market — and buyers are buying.
Although Broker Bay doesn’t provide a comprehensive look at the entire market covered by the Toronto Regional Real Estate Board (since its data relies upon the number of brokerages using its software), it does collect data from the largest brokerages, and has a very sizeable client base of small to mid size brokerages as well.
If the new listings and sales numbers are any indication of what’s happening with the overall market, home prices are bound to increase as sales (demand) outpace new listings (supply).
I wouldn’t get too excited, as it is too early to tell whether or not this increase in market activity will continue. But if it does, prices won’t drop. At the very least, they’ll remain steady or increase.
Alas, we can see that the market momentum is increasing. Buyers are looking at houses. Sellers are listing their houses. Buyers are making offers. Houses are getting sold.
Great — but what’s happening with prices?
In my previous article, I mentioned that home prices remained steady in April according to the Toronto Regional Real Estate Board statistics.
Once we see the mid-market report we’ll be able to gauge where prices are headed, and whether this increase in momentum will result in continued price growth for the real estate market.