December Market Watch
Wednesday Jan 06th, 2021
First and foremost happy new year everyone! 2020 was a rough year for everyone, but its a new year and real estate continues to move forward!
December showed a record number of sales in the GTA with 7,180 over 2019's sales of 4,364 an increase of 64.5%. This number is pretty staggering as December usually the market slows, but due to COVID-19 March / April (which had a -20.7% and -65.8% monthly decrease in sales). This caused the unfulfilled demand to continue to push sales all the way into December. The trends in November continued as the price of single family homes saw an increase of 16.13% compared to last December , and supply wasn't enough to fulfill demand.
Condo units still saw some downward movement as shown by a -2% decrease in price year over year. The decrease in prices however caused many investors and buyers to get into the market with December sales increasing 75.4% year over year. The large supply of condos may still continue into 2021 due to the province going back into lockdown, and condo owners being uneasy with the current market conditions. With a vaccine in play the market will ideally return to normal, but the bulk of the population will not be vaccinated until September 2021 so these trends for condos may continue for a while longer. It is evident that some buyers / investors are salivating at the chance of getting units at a lower price compared to previous months. Desirable units are still selling make no mistake about it.
In my eyes the real issue at hand would be the rapid inflation of single family homes. Detached, semi-detached, and townhomes are all way up. A lot of first time home buyers, and buyers in general are being priced out of the market. Often times I hear people telling me that they are waiting for the bubble to crash, but the last dip we saw was in 2017 and it was far from a crash. I do wonder if the government at some point is going to step in to create affordable housing. Inflation of course will account for some increase in prices, but lately we've been seeing some maina.
MLS creates a HPI (Home Price Index) it's essentially a more accurate calculation of increases / decreases in prices. The average or median price doesn't take into factor things such as the age of the home, number of bedrooms, upgrades, and more. With the HPI all those factors are calculated in order to see a more accurate representation of price increase or decrease. Taking a look at the chart below we can see that all single family homes including detached, semi, and townhomes all saw double digit increases in price year over year. The only thing that lagged behind was apartments / condos with Toronto seeing the least appreciation with only 0.76% year over year. The areas futher out saw even higher increases as the intial home prices were more affordable.
I'll leave some other charts below here just for you to glance over. It essentially goes over the same things I said above, but if you do have any questions please do not hesitate to reach out and contact me!
Below this some 2020 statistics
The year has been a crazy one with so much going on in the world. If you were thinking of buying home prices are sky high however, if you're waiting for the crash you may be renting for a long time to come. If you wanted to downsize or sell the market is extremely hot right now, and if all the cards align now would be one of the best times to.
I will be releasing a comprehensive 2020 recap and a 2021 market outlook soon!
I look forward to going on this journey with you!