The Toronto Regional Real Estate Board recorded over 95,000 home sales in 2020, the third most on record. The pandemic caused a big dip in activity from mid-March to the end of May, however there was a dramatic increase in number of sales for the rest of the year.
Single family homes saw unprecedented growth with sales prices and number of sales reaching record highs. (Single family homes - think detached, semi-detached and townhouses.)
However, 2020 was a tale of two markets. The condo market ending with more of a whimper when measured by price.
For December, condo average prices were down 2% (year over year) in the GTA.
In Toronto specifically, the prices dropped by 4.7%
There was a huge increase in 2020 in the number of condo listings coming onto the market, giving buyers an abundance of choice and stifling the usually competitive market.
There are a couple of major factors for this increase in supply.
1. Investors unable to rent their condos to students, immigrants, businesspeople and others with the borders closed.
2. The short term rental market drying up led to these types of units remaining empty.
3. An exodus of younger renters from Toronto, moving back home with family to save money (the rental market crash is real).
Eventually these types of units showed up for resale, along with many end users choosing to sell their units, searching for larger spaces either in the city or further afield (creating another booming market North, East and West of the city for freehold properties).
This sudden abundance of choice led to stagnant condo prices. This has been an extraordinary opportunity these past couple of months, to pay yesterday’s prices, today. This window of opportunity may be short lived, however, with a vaccinated public and open borders on the horizon. If ever you were to time the market, now is the time, and this “dip” may be short lived and nearing it’s end as we write this.
The traditional way to measure a Seller’s or Buyer’s Market is to analyze the months of inventory which is essentially the ratio between supply and demand. As you can see from the graphic below, inventory levels are dropping and this speaks to how we may now heading out of a short lived Buyer’s Market.
Looking at Central Toronto, where you find the majority of condos in the 416 area code, inventory levels have dropped by more than half of what they were in October, at their high point!
What does this all mean to you? If you have been waiting on the sidelines, this may mean your window of opportunity is closing. If you are a first time homebuyer looking to get into the market, this represents a huge opportunity to finally realize the dream of homeownership. For those of you who already own a home, now may be the time to purchase your first investment property. The possibilities are there.
Have any questions? Need help? Don’t know where to start?
Don’t hesitate in reaching out via call/text/email. We are here to help!
~ Jon & Cheryl