BREAKING NEWS: Toronto Real Estate Market! (December 2020)

Here you’ll find the most comprehensive monthly report about the Toronto real estate market’s Macro picture. In this article I’m gonna tell you WHY things are happening the way they are happening right now and how the market most likely could continue to unfold! ( you can view our past predictions, which are very close to what is happening right now on: Toronto’s Real Estate Market )

If you are a Torontonian Home Owner or Buyer, your main question might be: What will happen to the Toronto’s Real Estate market moving forward with COVID-19 Pandemic.

I can tell you there are a few areas of Toronto that are getting inflated. And also there are some areas where there is a window of opportunity for Toronto real estate enthusiasts.

Toronto’s Real Estate Market Overview

Our Micro analysis of Toronto’s neighbourhoods are based on being active in buying and selling on a day to day basis in Toronto’s market. Our approach to real estate market analysis has made our market reports one of the most credible sources for Toronto’s real estate market news for both end users and Toronto real estate agents.

In this article, following Toronto’s real estate market’s analysis, we’ll discuss how Toronto’s housing market might act in the future (our predictions), and what outcomes home buyers and sellers might face. And then we’ll review whether this is a good time to buy or real estate?

Toronto Home Prices are up 13.3% Year over Year

It’s big news that Toronto Home prices went up almost 13% while many people are dealing with the Second wave of COVID-19 Lockdown. But that’s HALF the story. If you are a potential seller, don’t be too happy, and if you are a potential buyer, Don’t Panic! I’ll explain why in a bit!

Let’s look at Toronto’s Housing Trend in the past few months, from when the Pandemic Started.

December 2020 has started with a total of 8,766 resale transactions reported through TREB’s MLS in Toronto’s real estate market.

One of the indications that I get is that the market’s activity in November, followed by October 2020, were abnormal. That means the number of sales in those two months were basically the pent up demand from before.

Interestingly the number of sales wasn’t the only indicator. Toronto’s real estate market is going forward strong.

But the more interesting price increase is the annual Year over Year price increase. Last year at the same time the average price of a home in Toronto was $843,307 , and this year it is $955,615 , this is a 13.3% increase year over year, which is a rare phenomenon in a November market ( with a couple times exception since 1996 )!

Freehold and specifically detached properties are in the highest demand in Toronto right now. (I’ve been predicting this back in April 2020 if you are following my content!)

What will happen to the Toronto real estate market in the near future:

The job market in Toronto is stronger than other areas of Canada. In a province like Alberta, the overall economy is very dependent on Oil, whereas in GTA we are mostly service based. So the national job market stats may not come into the play when you merely look at the Greater Toronto Area.

A big number of buyers that we are dealing with in Toronto’s real estate market on a daily basis are End users, those who need a home to live and or raise their families, are already in the market shopping for a home. Some investors are also out there looking for deals!

If you remember from my Toronto real estate market analysis you’d read when’s the best time to buy a home in Toronto. There you can see that Toronto’s seasonal markets are usually slower in January and February. So I predict that the winter market would be a little bit slower BUT not too slow.

The reason is that I see some of the frustrated sellers are taking their homes off the market. That will cause the inventory to shrink. So the demand would be less, and so would the supply.

However I had predicted this rapid growth in the market from over 6 months ago, the Rebound would be much quicker than the plunge. You can read my predictions in the April and or May’s Toronto real estate market analysis.

However, I still think that there would be ups and downs till we reach a balanced market,which stays here for a while!

I’ve mentioned before, that the time that it takes for a buyer to enter the market is faster than what it takes a seller to prepares and puts a house on the market. So when those buyers who’re on the sidelines now, enter the market, the demand would be higher than the then inventory. And that’s what causes multiple offers and drive the prices UP!

I strongly recommend that you set a strategy with your Toronto real estate agent now, if you are planning to buy or sell any time soon!

Supply and Demand levels in Toronto’s real estate market ( SELLER’S MARKET):

Active listings and Month of Inventory, are other indicators to keep an eye on. We started December 2020 with a total active listing of 13,798.

This is UP from last year’s 13,053 listings in the same month. That being said, the Month of Inventory (MOI) DECREASED to 1.6 Months of Inventory in all property classes in the Greater Toronto Area’s real estate market.

Just so you know, 1.6 MOI is considered a seller’s market! So buyers out there, beware of that! BUT it’s not for every area, some in some areas we have buyers’ markets! Contact us for more information.

Toronto Home Prices’ Annual Trend (13.3% Up)!

As mentioned, December 2020 has started with a total of 13,798 resale transactions recorded with an average sale price of $955,615. That is +13.3% Increase in Home Prices compared to last year in similar time in Toronto’s real estate.

That’s Toronto’s average by the way, we’ll review different property types to see what has happened to each property class in Toronto!

Toronto’s Condo Market (Condo prices Down 2% YoY):

Number of condo apartment sales in Toronto were approximately FLAT compared to last year. And, the average price of a condo apartment in Toronto was Down 2% , $605,863 compared to the year before.

Also I see increasing levels of inventory in the condo market especially in Downtown.

So if you are a buyer looking for a condo in Downtown, this is a good time to go and shop around and negotiate the prices. Now you can have multiple options without the fear of facing multiple offers like a few months back.

There is a small window of opportunity for downtown condo buyers to find deals. That window might be only a few months!

Downtown Toronto’s Month of inventory is 4.7 MOI which is a buyers market. So this is good news for buyers who are looking for a condo in Downtown Toronto, they can have lots of options!

But don’t get too happy if you are a Condo buyer in downtown, because we have seen the sellers resisting the price drops in some instances, and it depends on the case by case.

Also the month of inventory dropped from 5.4 the month before to 4.7. That shows that the demand is absorbing the supply. So the window of opportunity might not be open for so long! 

I highly recommend contacting a Top Toronto real estate Agent who covers Downtown Toronto and knows that market in and out if you are looking to make a move there.

Toronto’s Detached Houses (Detached house prices are UP 15.2% !) :

Detached is going Strong!

Toronto REALTORsⓇ sold 4,222 detached houses through TREB this past month. The average price of a Detached house in Toronto’s $1,202,281. This is a HUGE 15.2% increase in Detached Home prices in Toronto.

FYI the Average Detached Home Price in the City of Toronto is $1,477,226!

Month of inventory is a good indicator that shows the OVERALL supply/demand situation in each area. MOI has been 1.2 for detached homes in Toronto’s housing market. This means the Detached Market has been a VERY tight Seller market!

What I and my colleagues are experiencing in the detached market in Toronto, is multiple offers non stop on most of the detached homes ( Especially under the $1.5M price tag)!

Semi-detached Prices are Up 12.9% and Townhouse Prices are Up 12.6% YoY:

In the Semi-Detached homes market in Toronto we had a competitive market. Basically Semis were the property types that had very high gains in the past few months in Toronto! One of the reasons is that they are usually in the mid-high end of the freehold market!

The average price of a Townhouse in Toronto has been $750,939 and the average price of a semi-detached house in Toronto has been $946,735! For more detailed info about these property classes and their respective markets, you can contact us!

Predictions:

As a reminder, all the predictions, comments, and analysis in this post or any other blogs on TOrealestateagent.com are for informational purposes only and might change from time to time, and shall not be construed as any kind of advice, and it doesn’t create any client solicitor relationship whatsoever. Before making any decisions, whether real estate related or investmentment related, you must consult with your accountant, and your financial advisor and your own realtor and any other relevant professionals.

Important Comments and predictions for home sellers, December 2020:

In general, if you are a seller, you might find the next few months better than the past couple of months ( unless you are a condo seller in Downtown ).

The market looks to continue to grow and bounce back. In many sectors of the Toronto real estate market, we can expect a slight sellers real estate market, and in some others, a high sellers market.

However as I mentioned earlier, I see the market in the winter months ( End of Nov beginning of Dec ) starting to slow down and in some areas might see negative growth but that would be temporary.

Low interest rates and population growth are two major factors that push the demand in Toronto!

Each micro market in Toronto could have a different behaviour though. If you want to know about your specific neighbourhood, you still need to look at the stats in your own micro market. For more information you can talk to your real estate agent or if you don’t have any, find a Top Toronto real estate agent in your area.

If you need to sell, or you must sell to move, do it with all the health and safety precautions regarding the COVID19.

Important Comments and predictions for home buyers, November 2020:

In the past month, many of our buyer clients became active as they feel more confident about their jobs and financial security. Thus the demand is getting back to the market, and the demand is really what drives the market.

So if you need to move, or you must buy a home in Toronto, you must brace yourself for some competition with other buyers that have come to the market already!

But if you are a buyer looking for condos downtown, you can find good deals! In downtown Toronto, the condo market is a Buyer’s market. But I see that it won’t last forever, as you start seeing more good news regarding the COVID , the more confident people will become to go to the offices.

Also the government is planning to make it easier for tourists and foreign students and immigrants to come to Canada which will drive the downtown market again.

So right now there is a SMALL window of opportunity for those who are looking for a deal in downtown Toronto. Once they open the borders to the above, the market will start shifting in downtown as well.

You need to have your financing in order before entering the market right now, as you might face quite competition ( depending on the property class and location)! If you are looking for a detached, you’ll face more competition than a condo apartment!

Getting a consultation or help from a Top Toronto real estate agent would help you to overcome many of those obstacles easier.