Week 154: Stronger than expected employment signals another rate hike

I’m about to get some dental work done, so I’ll keep this short. So apologies to the four people that read this all the way through every week 🙂

Strong employment numbers in Canada nixed any chance of a halt to the rate hike cycle at the March announcement. You can almost guarantee a further 25bps hike and a similar announcement to the January one with a “we may hold, but we’ll have to wait and see how things play out” type message.

As you know, the January announcement created a false sense of hope, with many uninformed and overly optimistic Realtors announcing the return of the bull market.  (continued after chart)

Urban Markets: Downtown & Surrounding Areas
House Average Price: $1,684,329
House Median Price: $1,310,000
328 Active Listings
39 Firm Sales This Week
Months of Inventory (MoI) ~ 1.22 (up from 0.94 last month)
Average Days on Market ~ 13.33

Condo Average Price: $764,106
Condo Median Price: $700,000
1273 Active Listings
87 Firm Sales This Week
MoI ~ 2.16 (up from 1.81 last month)
Average Days on Market (DOM) ~ 26.85

What we have here, and I’ve said this several times, is a window for sellers to take advantage of quickly. We’re not in some market recovery mode here. We’re in a slow and steady balance, which should remain the theme for the balance of 2023 despite some moments of positivity and optimism followed by uncertain pessimism and bearishness.

The US Fed announced their inflation numbers with another minor drop in CPI month over month (7th month in a row). The US currently sits at 6.4% (down from 6.5% last month), but as companies scramble to hire workers, they’ll have to pay them more which would make goods and services cost more which would contribute to a prolonged and rocky recovery, back to the target 2% inflation rate. It’ll be a long while before we get there.

Why does what’s happening in the US matter to us? Considering the US is our largest trading partner and the Band of Canada does what the Fed does, they’re like a little window into our future.

So what does all of this mean to Toronto Real Estate? (continued after chart)
Urban North: Rosedale, Deer Park, Moore Park, Forest Hill, & Lawrence Park
House Average Price: $3,326,833
House Median Price: $2,528,000
95 Active Listings
6 Firm Sales This Week
MoI ~ 1.84 (up from 1.65 last month)
Average Days on Market ~ 9.17

Condo Average Price: $966,536
Condo Median Price: $879,000
187 Active Listings
11 Firm Sales This Week
MoI ~ 2.85 (up from 2.14 last month)
Average Days on Market ~ 28.64

The strong employment numbers are a good thing for anyone worried about the value of their property.

Many big companies are letting go of excess staff, but many of those jobs are being absorbed into the marketplace by small/medium-sized businesses (mine included).

So in the short term, strong employment numbers mean higher rates for longer; they also mean less distressed sales on the market. This also means lower listing supply overall which is an excellent sign for would-be sellers and not a great sign for anyone looking to buy.

I’ve said that the bottom of the market is behind us, and I firmly believe that to be the case. Right now, I’m not seeing anything that could affect prices. The next couple of quarters should be reasonably predictable, with ebbs and flows on the back of good and bad news. (continued after chart)

Leaside, Davisville, Yonge & Eglinton
House Average Price: $1,756,333
House Median Price: $1,700,000
34 Active Listings
9 Firm Sales This Week
MoI ~ 1.11 (up from 0.75)
Average Days on Market ~18.11

Condo Average Price: $782,667
Condo Median Price: $675,000
109 Active Listings
9 Firm Sales This Week
MoI ~ 2.01 (up from 1.61 last mth)
Average Days on Market ~ 26.78

Weekly reporting will be even more critical, and timing the market may actually be possible in an environment like this. But if you’ve consumed even 10% of our content, you’d know that we’re not day traders regarding real estate.

We’re always buyers regardless of the market.

Sellers, get out there and sell today. Your window of opportunity will soon close, and we should see a lull in the market as we approach the summer months. From now till April/May should be strong, though, as people ride out their locked-in pre-approvals ahead of the March rate hike.

And on the off chance we don’t see a rate hike in March??? Buckle up.

Any questions? The entire team and I are here to help. Email/comment/text/smoke signal, and we’ll get back to you. (continued after chart)
Birch Cliff
House Average Price: $1,395,500
House Median Price: $1,091,500
13 Active Listings
3 Firm Sales This Week
Months of Inventory (MoI) ~ 0.74 (down from 0.89)
Average Days on Market ~ 11.67
Kingston Rd Corridor to Highland Creek
House Average Price: $1,085,143
House Median Price: $1,125,000
35 Active Listings
7 Firm Sales This Week
Months of Inventory (MoI) ~ 0.74 (up from 0.54)
Average Days on Market ~ 7.29

Condo Average Price: $506,000
Condo Median Price: $506,000
39 Active Listings
1 Firm Sales This Week
MoI ~ 1.81 (up from 1.63)
Average Days on Market ~ 66

Have a wonderful day, and I’ll see you next week. Don’t forget to subscribe to the blog so you get this in your inbox asap, and we’ll see you on Youtube!

(please subscribe to the YouTube Channel here, where I go over all of these reports in more detail)

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