Let's go back a couple of years and recap what words captured our minds and attention (we know most of us don't event want to think about it). 2020 was all about "Covid-19" and "Corona" (not the beer of course). Then 2021 came and it was "Vaccination", "Pfizer", "Moderna" and in real estate "bidding wars", "multiple offers", "zoom" and "work from home". And now in 2022, "Inflation" and "Bank of Canada" are the two words in every discussion we have with our clients -- don't believe we ever paid that much attention to our central banks' rate announcement in recent memory.
As we observe the current state of real estate, we are of the opinion that 2023 will be the year of "STABILITY". While there is still a lot of uncertainty out there and the word "Recession" will be all over the media as we head into this economic reality, we believe the real estate market will begin stabilizing in 2023. The market, as some might think is weak. However, we believe the market is still strong based on the overall activity and continuous lack of supply. We are not seeing people rushing to sell and simply waiting until the mortgage rates and costs begin to stabilize. With that, let's take a look at the numbers.
Average Sale Price in the Greater Toronto area, inched up again in October by 0.2% on a month over month basis and is currently sitting at $1,089,428. Keep in mind that this is the third straight month of a slight month-over-month increase. On a year-over-year (YoY) basis, October, however, saw a decline of 5.7%. And this YoY gap will likely widen between November 2022 and March 2023 as home prices simply skyrocketed during last year's winter months until they reached their peak in February 2022.
New Listings in October declined another 7.5% from the previous month which continues to prove that many sellers are simply staying put and likely waiting for the market to stabilize.
Sales, on a month to month basis, were not much different from September with a small 1.5% decline but a 50% drop from a year ago. This is understandable given the hyperactivity in 2020, 2021, and early 2022 and we believe the market is going through a Reset.
The region continues to grow with 90-100K new immigrants coming in the next 12-18 months who will need a place to live (majority of whom plan to purchase their own home); Inflation will eventually start showing signs of weakness; and many people who have been sitting on the sidelines will begin entering the market after taking a bit of a break from buying and selling.
