What is in store for the next few months in the real estate market? Let's start by looking at how February ended. The Greater Toronto Area (GTA) market, as reported by The Toronto Regional Real Estate Board (TRREB), continued the trend of fewer sales relative to this time in 2022, however sales in February 2023 were up 54% over January showing continued demand for the fewer active listings. New listing in the GTA did increase over January by 679 units or 22% but were well down from February 2022. Average prices across the Board communities, for all home types, rose 5.4% above January to $1,095,617, perhaps giving some indication of what may be ahead for the Spring Market. For the full TRREB Report click Here
While the number of homes available for sale have been lower we may be seeing the start of selling price increases as the Spring Market begins. This will obviously vary for each community so don't just rely on regional trends, contact our team to learn more about areas of interest. Qualified Buyers are finding good value relative to last year. February 2022 was the high water mark for home prices and they had been in a steady decline until January of this year when prices began to stabilize on the whole. The chart below shows where the average selling prices for all home types was at February month end compared to February 2022 and 2020. Even though home prices are now considerably lower than at the peak of 2022 they are still up substantially over 2020. This is good news for Sellers and Buyers. If you didn't sell your home in 2022 you need not be concerned as your home's equity growth is still very good and a new home will cost you less. Same for Buyers, if you felt you missed out on buying in 2022 you are now at a better price point for a home than in 2022. For some Buyers it may even cost them less in monthly mortgage payments than if they bought in 2022 at higher prices and lower mortgage rates. We described how this was possible in an earlier newsletter that can be read by clicking Here
| Average Price Changes for All Home Types Since February 2020 | ||||||
|---|---|---|---|---|---|---|
| | | | February | | ||
| | | | 2023 | 2022 | 2020 | % Change For |
| | | | | | | 2020 to 2023 |
| City of Toronto | | $ 1,071,043 | $ 1,210,889 | $ 989,218 | 8.3% | |
| Peel Region | | 1,032,286 | 1,317,192 | 861,537 | 19.8% | |
| York Region | | 1,302,720 | 1,587,603 | 1,015,558 | 28.3% | |
| Durham Region | | 888,448 | 1,228,990 | 657,788 | 35.1% | |
| Halton Region | | 1,222,095 | 1,530,224 | 977,617 | 25.0% | |
| Simcoe County | | 905,114 | 1,232,479 | 657,945 | 37.6% | |
We have assembled some trends and things to consider if you are looking at buying or selling in the months ahead.
1. Contact us for more details and to learn more about our amazing services for Buyers and Sellers
2. As stated above, selling prices are stabilizing and increasing in most areas of the GTA.
3. A recent IPSO polling suggests home buying intentions have picked up for 2023, confidence is growing
4. Increased demand will run up against constrained active listing levels and could lead to increased competition for Buyers leading to higher prices
5. Home prices are still historically high even after recent declines
6.The housing market activity will pick up in the Spring as mortgage rates begin to ease. Mortgage rates have been on a slow decline since December. A Five year fixed rate is currently around 4.64%. Mortgage interest rates are still at levels below historical averages
7. Selling prices may continue to be soft in homes priced at over $1million. According to TRREB the share of sales below $1,000,000 was 57 per cent in February 2023 versus only 38 per cent a year earlier
8. Stiffer competition for Buyers in homes priced under $900,000 as we move into the Spring market. Current Buyer competition has homes in some segments selling for 1-6% over asking price on average and as high as 16% more than asking in homes priced under $750,000 based on February trends in Durham Region
9. Condos are offerring a very good opportunity for Buyers. In Durham Region the greatest activity is in the $500,000 to $750,000 range with 73 sales in February at an average selling price of $610,000
10. Rental rates continue to rise in the GTA. The average rent for a one-bedroom condominium apartment increased by 19 per cent to $2,503 in the fourth quarter of 2022. Over the same period, the average two-bedroom rent increased by 14.1 per cent to $3,178. According to TRREB, "tight rental market conditions and strong rent increases will be the norm more often than not for the foreseeable future. On one hand, we will continue to experience strong rental demand in the GTA based on solid fundamentals. On the other hand, the persistent supply shortage will continue to result in strong competition between would be renters, exerting upward pressure on rents". This could make owning a home more attractive to some renters.
We are happy to see the market picking up and those that act sooner often get the best advantage. Contact us to discuss opportunites and why you should work with The Jenkins Team.