Declining home prices have been the trend for some time all across Canada, but to some extent the major metropolis regions with desirable living areas have been somewhat insulated against that, but with ‘somewhat’ being the operative word. Generally speaking the price declines in Vancouver and Toronto have still been quite profound and a cause for a variety of sentiments depending which end of the spectrum you’re on – homeowner or prospective homebuyer.
What we’re seeing is the trend is slowing to an extent, but with the BoC raising interest rates again recently any marked swing in the other direction simply isn’t going to happen. What we are seeing for the 2 biggest metro areas in Canada is that sales went up in August, but they’re still down from where they were at for Labour Day at the end of August / Early September 2021. Of course, the primary factor behind this is going to be that there is a large volume of homeowners who may be considering selling, but don’t absolutely have to sell at this time.
These homes will go on the market at a later date when median home values increase. This does equate to a good number of very desirable clientele not working with real estate agents like they might be if the market was still as hot as it was in preceding years. This may sting more for some realtors more than others, but here at Real Estate Leads our online real estate lead generation system is an excellent way to have the power of Internet Marketing countering the downswing and making it more likely that you can generate new clients at a time when they may be harder to come by.
Moving back to our topic here this week, let’s look at the workings on what’s going with Toronto real estate and the slight uptick in homes sales from July
Eased Prices from Winter
The TTRREB has put out their report showing August sales were down 34% from this time last year, but up almost 15% from July. This month-to-month increase is being attributed to buyers returning to the market to take advantage of prices that eased from winter’s elevated levels. Sales in Toronto for the month worked out to 5,627 compared to 8,549 last August and 4,900 for July 2022.
On the other side the 34% ear-over-year drop was a less drastic decline than the previous 4 months, and the belief in the industry and among local real estate pros is that we’re still bouncing around levels that only have the depth of the COVID shutdown and the 2009 financial crisis as comparable precedents. The region’s real estate market has cooled from the heated conditions seen in the early months of 2022. Climbing interest and mortgage rates in recent months have certainly suppressed sales activity and started to weigh on prices. On the plus side for buyers there are fewer bidding wars and prospective buyers are more able to sit on the sidelines and wait for price drops to come down even more.
8.9% Home Price Index Rise
Evaluating on a year-over-year basis, the home price index increased by 8.9% and the average selling price for all home types combined went up by 0.9% to $1,079,500. In comparison to July though, the index is quite a bit lower. $1,130,463 was the seasonally adjusted average selling price, and that works out to around 2% month-over-month, but down around 12% from $1,285,129, when the GTA experienced its highest average price of the last year.
Monthly growth see for the average price added to a dip in the index points to August having a greater share of more expensive home types sold. New listings for August worked out 10,537, a decrease of just 1% from August 2021 and its 10,615 sales. There is also definitely far fewer new listings coming onto the market.
An overarching belief around these numbers and the trend is that more and more prospecting buyers are becoming more comfortable with the new reality of the current cost of borrowing. They may have realized they’ve lost some degree of their buying power, but they’re re evaluating and making their home purchases differently as a result of it.
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