Welcome to our Market Update – a recap of stats for the month of March 2018.
April is a bellwether month, and it’s usually a good measure of what’s to come for the rest of the year. Our prediction? Based on the current numbers, the rest of 2018 will see healthy growth. Nothing crazy, like last year, but steady. It’s definitely not the doom and gloom scene the media keeps talking about – and buyers are realizing that pretty quickly.
Condos in the core are HOT
Things are especially strong in the core. C01, the area bordered by the lake, Bloor, Yonge and Dufferin, is a good example. The market there is being driven by condo sales. Last month, there were 432 condo units listed and 424 sold. If there were no new units coming onto the market, they would sell out in less than a month. That’s an indicator of a super-hot market.
Condos in the core are an extreme seller’s market. They’re up 7.1% year over year from 2017 – there was no slump in this sector. People are focusing on what they can afford, which means demand is high, inventory is low and prices are really getting pushed.
People want condos downtown – and here’s a good example of how much. We recently had a client looking at a starter unit on McCaul, an area that hasn’t been very desirable historically. It was 450 square feet, with no parking, no locker, and no dishwasher, listed for $378K. That unremarkable unit saw not one, but two bully offers and sold for well over asking.
But that’s the 416. If you look at the 905, things are more sluggish. Richmond Hill saw 83 sales out of 565 active listings – things there are coming back a little more slowly. If you divide 565 by 83, you get a 6.8 absorption rate, which basically means it would take close to seven months to sell off the inventory if nothing new came onto the market.
The market is balancing out
Overall, however, the March absorption rate for Toronto was only 2.1 months. Most North American cities have a 4 to 5 month average, so that’s another indicator that our market is doing well. Yes, there are some areas of softness, but it’s obvious that confidence is growing. People are seeing the numbers going up and getting in before they get even higher. What we’re seeing overall is a balancing. It’s not as frenzied as last year, but things are definitely moving in the right direction.
Average prices are increasing steadily
In January, the average price of a detached home in Toronto was $735K. In February it was $757K, and in March, $784K – that’s a 2% month over month increase. Year-over-year numbers might be down, but three straight months of growth is a very good sign.
Confidence is coming back. Some people are still staying on the sidelines because of all the scary headlines, but more are seeing a disconnect between what the media is saying and what they’re seeing on the ground. People are surprised to see list prices versus selling prices.
People are always asking us if they should buy now or wait. Prices are steadily going up all over the GTA – some areas faster than others – so we would say yes, now is a very good time.
Do you have questions about the market? Let’s talk!
