No matter what you hear on social media, September wasn’t a good month for Toronto real estate.
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In fact, home sales in September hit the lowest level since 1996, with the Toronto Regional Real Estate Board’s Market Watch released last week showing just 4,642 homes sold for the month, an increase of 7.5% compared to the previous year. % decrease. This is a significant decrease from the 5,294 cases reported last month, a 12% decrease.
Wait, wait, wait, someone will cry. Prices are actually up 3% over last year and 3.4% over last month. This is no mean feat, as the average sales price in the city is currently $1,119,428. But it’s far from a scathing indictment that there’s nothing to see here.
From what I have observed happening in the upper echelons of the luxury market, several large sales were reported during September, especially across cities as there were very few market-pulling transactions. That would certainly give some buoyancy to the average selling price of. It’s far away on average.
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At the same time, inventory began to be released, with listings increasing 32.2% over last month. To give you some context, there was very little action this summer. Many sellers and their agents are holding back in anticipation of the fall market, which explains the month-over-month difference.
And when compared to the almost non-existent inventory that the Toronto market has had to contend with for years and years, this is a de facto It feels like a flood. Some might say that while this may finally be approaching the “buyers’ market” that many of us remember, we still remain firmly in the realm of a balanced market.
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As for what conclusion to draw from this, the most basic truth is also the most inescapable fact of the moment. After 18 months of rising interest rates, affordability has completely taken a hit and a large number of buyers have been removed from the market.
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It’s no longer just that buyers are concerned about potential volatility and decide to wait and see. Many of those who still want or need to transition are out of the market because they don’t earn enough to qualify in their current circumstances.
All the while there are still buyers, which explains the fact that prices have held up across the board. In fact, on average in Toronto, detached homes are currently selling for 100% of the asking price, and semi-detached homes are selling for an average of 104% of the asking price. Townhouses achieved his 103% and condos achieved his 99% of the list.
But even that number hides the reality that many properties are listed and relisted multiple times before an offer is accepted. What is clear, however, is that prices (and expectations!) are gradually coming down on the surface, rather than active trading.
As the fall progresses, we may see more of the same, and with it, a reluctant reception among sellers whose properties need to be relocated. But as long as this stagnation continues, any swift and decisive redress seems far away.