TRREB’s July GTA Data.

Along with the regular responsibilities of keeping your clients happy, one thing that all realtors face on a daily basis is responding to the question “So.. How is the market?”. I always find myself in a situation where I need to work extra hard to answer it without overly generalizing and it is not always an easy task.

For example, if I were to answer how the market was this past July, I would need to work extra hard to drive home the idea that a slower market doesn’t mean that the market is slow. So let’s first take a look at how the market has performed last month.

How Did The Market Perform In July?

The demand has subsided from the earlier months of this year and there is definitely a sharp decline in sales activity that is taking place right now. This is due to the fact that the real estate market can only expand so much, when it is driven solely by the domestic demand.

On top of it, July and August are historically slower months. It’s those two precious months of the year where we can enjoy the beautiful weather and people tend to choose to spend more time enjoying the rare occurrence of 20+ degree weather, while it lasts.

In my opinion, these are the main two reasons why there was a -15.4% decline in sales since June this year and -14.9% since last July. This year’s March was a peak of the market and sales dropped -40% in July compared to that month.

Prices have also experienced a small decline in July. The average sale price (a composite across all asset types) is still up +12.6% since last year, but it did drop by -3.2% from March and -2.5% from June.

Buyers Are Still Facing Fierce Competition

Now that we have covered the decline in sales activity, let’s talk about another factor – the supply of inventory. The sharp decline of new listings has pushed the market deeper into the seller’s zone. There are less listings at the moment, so there is no shortage of bidding wars going on.

In fact, even though it is deemed to be a slower market, we need to always remember what we are comparing it to. In July 2020, we have experienced an unprecedented surge in activity and the market looked very differently from any other (regular) July. So when compared to the historical sales activity during the summer, this year’s July is actually quite a busy month.

Detached homes have experienced an annual price gain of +21.7%, semis went up by +12.2% and townhouses by +15.9%. This is with the decreases in sales activity by -26.4%, -18.5% and -8.2%, respectively.

The Comeback Of The Condos

Condos are the only asset type that experienced and increase in sales activity (+8.2% year over year) bringing the average price across the GTA to $674,490. There are many first-time home buyers on the market that are looking to secure a home ownership prior to the anticipated surge driven by the renewed immigration and investment.

How Is It Looking For The Fall Market?

We currently find ourselves in an unprecedented situation, but one thing is clear: today’s lack of inventory on the market can result in a sharp increase in prices when the borders open up. TRREB CEO John DiMichele warns that the large portion of the renewed immigration and foreign investment will find itself in the GTA. He states: “This means ownership and rental market conditions will remain tight with upward pressure on prices for the foreseeable future. Policy makers at all levels must pursue a coordinated effort to bring on a greater diversity of supply in major metropolitan areas.”

If you are looking to purchase a property this year, don’t let the lack of inventory scare you off buying. Let’s hop on a call today so and I will be happy to explain the strategies I utilize for my buyer clients when I look for homes with them.