08 Feb 2022
Episode 101: Downtown Toronto’s average house price surpasses $2mm for the first time
Episode 101: Downtown Toronto’s average house price surpasses $2mm for the first time
We are 101 weeks into this weekly real estate reporting journey, and what have we learned? Well, hopefully you’ve learned that Toronto’s urban markets are the most resilient on the planet.
Hopefully, you’ve learned that as long as you’re focussed on the long-term buying anything at any time makes sense.
Hopefully, you’ve also learned that you’re not supposed to look at real estate like a day trader.
So much time and energy is spent on “predicting crashes” and “when’s the next buying opportunity” that people forget that at no point in the history of Toronto has someone not ended up ahead, if you zoom out to seven to 10 years on any graph.
So what’s the story of the week? It’s urban luxury.
For the first time in Toronto’s history, we have a weekly average for urban Toronto freehold homes at over $2mm, $2,173,777 to be exact.
Based on 78 sales (up 18% week over week) from January 30th to February 5th.
We sold this home on Lisgar for $100K over asking with no competition. A home we listed at an already high $4.3mm…we got $4.4mm for a beautifully crafted semi-detached house in one of Toronto’s hottest communities.
Our seller was ecstatic, but also surprised.
We did not expect to have over 30 showings in 24hrs for a $4.3mm home in downtown Toronto. Why? I always assumed people with budgets this high were shopping in Forest Hill, Rosedale, or Yorkville. Not on Lisgar Street in West Queen West.
Have buyers been priced out of Rosedale’s of the City? Are they coming downtown to get more bang for their buck?
I don’t think so. People just want to be downtown. They want to be surrounded by all things that make Toronto so awesome.
This year, we’ll see $3mm to $4mm houses regularly sell in North Riverdale. We saw the community achieve $2mm regularly at the beginning of 2021. But, North Riverdale smashed through the $2.5mm barrier and carried on to $3mm. Is the sky the limit? Long-term, yes!
Are we nearing the end of this aggressive bull run in Toronto real estate? Who knows, but one cannot expect these aggressive price gains to continue. There will be a slow down as we enter the spring season.
Notice how I didn’t say, spring market? Any agent that refers to the spring market hasn’t been doing their homework. If you’re being advised to wait for the “spring market” to sell, then you need to find another agent.
If you absolutely must sell, now is the time to do it. Not spring. Things will inevitably slow down as we approach the April Bank of Canada announcement, which should also coincide with a slew of measures to “cool the market.”
What will these “measures” be? Aside from the apparent rate hike, you can expect more stringent stress testing for borrowers; you can expect some sort of new taxing situation and perhaps even a temporary ban on foreign ownership.
Whatever the announcement is in April, you can rest assured that it will affect buyer sentiment and calm things down for a little while.
But, don’t get all excited, my little real estate bear, even if we did have a price correction in the short term…we’ll just go back to mid to late 2021 pricing. Will you feel like buying then? Wonder where your head will be if you see pricing coming down? How will you time the bottom? Will you have the cash and the cajones to buy if prices are coming down?
I don’t see prices coming down. Why would they? Let’s talk about that.
There will be downward pressure on homes (houses and condos) if more listings than buyers. This time last year, we had just under 1100 condos for sale in our urban communities (and 269 houses). Right now, we have under 650.
There needs to be a lot of panic selling and many buyers removed from the marketplace, due to whatever measures the Federal government announces in April for any serious price movement to occur.
What’s more likely to happen is a flattening of the appreciation curve.
Mid 2022 should be a much calmer market, but the newly achieved high prices should be supported in our urban markets.
What about the suburban markets or the commuter communities that saw such aggressive gains in 2021? Well, they’re usually more susceptible to price fluctuations. That’s precisely what happened after the Provincial government launched the 2017 Ontario Fair Housing Plan.
There was a brief period of calmness in our urban communities, with prices of some properties may be taking a 5% hit. But, the burbs got hammered. Some properties fall by 30% in what seems like overnight—people not closing on their properties…all sorts of mayhem.
That’s why I love Toronto’s urban markets and only invest here. Sure, there’s very little (to no) cash flow in my investments. I see a lot of value in capital appreciation, principal recapture, and the fact that I can sleep at night knowing that the global demand for Toronto will always protect my investment.
Anyway, as a reminder to buyers, please understand that the price you pay will likely be a new high price if you’re going to buy. This is not the time to try and save a few grand here and there. You have to be pre-prepared and aggressive to be successful.
Sellers, getting to market as quickly as possible is the best way forward here. Our team can take your property…no matter what shape it’s in today, to market from start to finish in about a week. (Less if there isn’t much work to be done).
Have a wonderful day, and don’t forget to share this. We have over 42,000 subscribers, and the list keeps growing. Thank you for that!
And, don’t forget to follow us on Instagram and Facebook. We post some real-time stats on our channels you don’t want to miss. You can also catch up on my 2022 real estate forecast post here.
That’s all for today; thanks so much for your energy and attention. If you want some clarity on the market and your specific situation, please DM, comment below or email Ara@thespringteam.ca.
Urban Markets: Downtown & Surrounding Areas
House Average Price: $2,173,777
House Median Price: $1,850,909
236 Active Listings
78 Firm Sales This Week
Months of Inventory (MoI) ~ 0.62
Average Days on Market ~ 9.52 DoM
Condo Average Price: $822,884
Condo Median Price: $750,000
644 Active Listings
188 Firm Sales This Week
MoI ~ 0.65
Average Days on Market (DOM) ~ 15.01
Urban North: Rosedale, Deer Park, Moore Park, Forest Hill, & Lawrence Park
House Average Price: $3,903,442
House Median Price: $3,678,000
55 Active Listings
12 Firm Sales This Week (more than double last week)
Months of Inventory (MoI) ~ 0.71
Average Days on Market ~ 29.67 DoM
Condo Average Price: $1,318,926
Condo Median Price: $1,300,000
132 Active Listings
15 Firm Sales This Week
MoI ~ 1.45
Average Days on Market ~ 26
Leaside, Davisville, Yonge & Eglinton
House Average Price: $2,266,143
House Median Price: $2,202,000
21 Active Listings (nearly doubled week/week)
2 Firm Sales This Week
Months of Inventory (MoI) ~ 0.50
Average Days on Market ~ 10 DoM
Condo Average Price: $808,346
Condo Median Price: $770,000
47 Active Listings
13 Firm Sales This Week
MoI ~ 0.59
Average Days on Market ~ 16.66 DoM
Birch Cliff
House Average Price: $1,362,500
House Median Price: $1,400,000
14 Active Listings
1 Firm Sales This Week
Months of Inventory (MoI) ~ 0.61
Average Days on Market ~ 8.6 DoM
Kingston Rd Corridor to Highland Creek (NEW Week 2)
House Average Price: $1,534,327
House Median Price: $1,370,000
48 Active Listings
17 Firm Sales This Week
Months of Inventory (MoI) ~ 0.60
Average Days on Market ~ 9.72 DoM
Condo Average Price: $617,550
Condo Median Price: $657,500
21 Active Listings
8 Firm Sales This Week
MoI ~ 0.54
Average Days on Market ~ 20.4 DoM