11 Oct 2022
Week 136: The great crash has happened. Is this the bottom?
Week 136: The great crash has happened. Is this the bottom?
What do Leaside, Birch Cliff, and the Kingston Rd corridor have in common?
They’re the three most undersupplied communities in Toronto at the moment, and they happen to be on our tacking list and have been for 136 weeks now.
Why does this matter?
Because these are areas outside the core, many thought would be riddled with desperate sellers who “got in at the top” of the market and were expected to flood the market with their newly acquired assets.
In reality, these are “urban adjacent” communities with amazing access to transit, are relatively walkable, and offer homes larger than their urban counterparts.
All these make them hugely in demand by end users, developers, and the odd speculator.
But does this mean that the other communities we track, like the downtown area and the posh communities of Rosedale, are being flooded with new inventory daily?
(continues after chart)
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Urban Markets: Downtown & Surrounding Areas
House Average Price: $1,551,813
House Median Price: $1,373,000
517 Active Listings
47 Firm Sales This Week
Months of Inventory (MoI) ~ 1.72 (up from 1.33 last month)
Average Days on Market ~ 13.91
Condo Average Price: $856,119
Condo Median Price: $720,000
1617 Active Listings
68 Firm Sales This Week
MoI ~ 2.15 (up from 1.78 last month)
Average Days on Market (DOM) ~ 23.29
No. All other communities have maintained a level of supply that’s still considered to be in Seller’s market territory. But keep in mind that the MoI (months of inventory) data is a tough one to take fully seriously at the moment.
Why?
We’ll have to wait another couple of months for a full year of slow sales to be factored into that calculation.
Remember, having only 47 houses and 68 condos sold in a week is not normal and is a strong window into how buyers feel.
The next hike on October 26th will be another hit to many buyers but should fuel the rental market further.
Again, this is your weekly reminder to take all real estate reports and truth-tellers with a grain of salt.
Just because the market isn’t in a good place now doesn’t mean we’re stuck here for the next decade. Regardless of what happened with past recessions, things move faster now. We’ll cycle through this downturn quicker than 40 years ago.
But 2023 will not be a time of big equity gains for existing property owners.
There should be some pricing stability and a continued strong rental market.
But that all depends on jobs.
Many were confusingly using mid covid high unemployment as an indicator of what was to come to scare people into not making investments. But if you dug down at the time, most of the jobs lost were low-paying service industry jobs that weren’t the typical buyer and home seller.
However, this time, during a recession, some higher paying jobs could be affected. Which could result in some more selling by folks needing to cash out. (continued after chart)
Urban North: Rosedale, Deer Park, Moore Park, Forest Hill, & Lawrence Park
House Average Price: $3,497,943
House Median Price: $3,640,000
143 Active Listings
8 Firm Sales This Week
MoI ~ 2.49 (up from 1.31 last month)
Average Days on Market ~ 24.43
Condo Average Price: $1,193,560
Condo Median Price: $825,000
192 Active Listings
7 Firm Sales This Week
MoI ~ 2.47 (up from 2.12 last month)
Average Days on Market ~ 12.29
But that remains to be seen.
If that does happen, we’re not at the bottom now.
If that doesn’t happen, then we’re at the bottom now.
Either way, buying opportunities exist out there. And not just in assignment land.
If you’re a buyer right now, now’s your time to shine and make those low offers your agent was advising you against a few months ago.
Please remember that some homes are currently still heavily in competition. Some homes are still getting dozens of offers and selling for bigger-than-expected numbers.
And your agent should be able to advise on the best path forward once you come across a home you love.
So what do you do if you’re a seller right now? (continued after chart)
Leaside, Davisville, Yonge & Eglinton
House Average Price: $1,728,667
House Median Price: $1,652,000
44 Active Listings
7 Firm Sales This Week
Months of Inventory (MoI) ~ 1.35 (up from 0.73)
Average Days on Market ~ 9.17
Condo Average Price: $733,887
Condo Median Price: $777,000
162 Active Listings
7 Firm Sales This Week
MoI ~ 2.61 (up from 2.50 last mth)
Average Days on Market ~ 26.71
If you’re a seller, number one, I’d hope that you haven’t bought first. Because the market is surprising us daily and not hitting some “worst-case scenario” numbers.
And we don’t want our seller clients sitting on the market at a high price and then chasing the market down.
Right now, if you’re a seller, I’d strongly recommend you list at an insanely low number and hold back for offers.
If you want $1.1mm, list at $799K; if you want a million, list at $600K. Just so low that you can’t help but generate activity and pull buyers away from other listings.
Make the focus all on you, and then you can get a few offers to the table to create leverage. Create leverage for a seller in a market which has done nothing but shift the power away from the Seller.
That’s the only way you can take more control of the Selling process.
The alternative is to list at a higher price and wait for the buyer…but not too high otherwise, you’ll miss your buyers.
Then you end up chasing the market down for weeks or months. (continued after chart)
Birch Cliff
House Average Price: $939,580
House Median Price: $899,000
27 Active Listings
5 Firm Sales This Week
Months of Inventory (MoI) ~ 1.36 (up from 1.63)
Average Days on Market ~ 29.6
In an ideal world, you’re not making any big panic decisions.
The market will bounce back, and your asset will be worth more a year from now (maybe a hair longer) so if you can hang on, please hang on.
Just like we were saying during the meat of covid, do whatever you can to hold on to your property during these times of hyperinflation.
Panic selling only benefits one person: The Buyer. They’ll take that equity to the bank once things recover and rates begin to come down.
Buyers, you should all be out there looking for good buys right now. But very important to leave some gas in the tank should your circumstances change as we dig into a recession.
Kingston Rd Corridor to Highland Creek
House Average Price: $1,282,667
House Median Price: $1,125,000
75 Active Listings
2 Firm Sales This Week
Months of Inventory (MoI) ~ 1.56 (up from 1.35)
Average Days on Market ~15.78
Condo Average Price: $523,333
Condo Median Price: $620,000
70 Active Listings
3 Firm Sales This Week
MoI ~ 2.72 (up from 2.34)
Average Days on Market ~ 5.67
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