October stats from TREB provoked some flashy headlines calling October market conditions either a correction or a rebound. Why do we get such polar opposite comments on the same data? Let's look into it!
The average price reached $780,104 as it was up 2.3 per cent year-over-year and slightly up from September 2017. Divided by property type, the detached homes were the only segment that saw lower prices year-over-year (1.1 per cent), whereas the prices for condos surged by 20.9 per cent compared to October 2016.
There were 14,903 new listings this October, a 11.8 per cent increase year-over-year. Active listings amounted 18,859, which represents a 78.5 per cent increase compared to October 2016. The property spent 23 days on the market on average in October.
There was a sharp decline in sales by 26.7 per cent in October 2017 compared to last year as the sales amounted 7,118. However, as it was highlighted in the TREB report, the sales were up by 12 per cent compared to the previous month. Does it mean the market is picking up at a fast pace? Yes and no.
The sales hike between September and October is quite common, and it also happened in the previous years. Although to be fair, the month-over-month increase in sales in October 2017 was 11.6 per cent, whereas in 2016 we saw a decrease in sales by 1.4 per cent between September and October, and in 2015 and 2014 the sales increased by 7.4 per cent and 6.2 per cent accordingly.
The average selling price for October 2017 transactions was $780,104 – up by 2.3 percent compared to the average of $762,691 in October 2016. However, most people only remember last April when their neighbour sold and the average sale price had risen in a 6-month window to $916,567. The market may be up a little from October 2016 but it is down 20 per cent since April 2017. Sellers must adjust their expectations if they really want to sell.
Below is a graph from the Toronto Real Estate Board which shows you the six-month blip that prices are being based on. Reality sucks but in waiting for the market to come back, there are huge opportunity costs.
In a booming market everything will sell even with some shortfalls; lack of parking, location, view, semi vs. detached, etc. However in a tougher and more normal market these issues become monumental. Please remember that our last market correction in the GTA took 5 years and also if you are selling to buy, then buying in the same market has great advantages.
The market is a very interesting place at the moment. Condominiums are flying off the shelf and a lot in multiple offers- not like $80,000-$100,000 over asking like earlier this year but still more than asking. The freehold residential market is slower than before, properties are spending more days on the market and then eventually selling for asking or slightly below. This is more of a balanced market and both buyers and sellers who have realistic expectations are doing well.