As the weather continues to warm up, so does the real estate market. A total of 21,630 new listings entered the market in April 2017, which is a 33.6% increase compared to April 2016, which saw only 16,190 new listings. New listings were up by double-digits for all low-rise home types, including detached and semi-detached houses and townhouses.
Although sales volume was down by 3.2% (11,630) compared to the same time last year, the average price of a home remained strong. The average home price in the GTA went from $739,762 in April 2016 to $920,791 in April 2017, a 24.5% increase. Detached homes in Markham stayed true to the trend as the average price increased by 25% to $1,715,311 from $1,363,887 a year ago. Markham, Unionville and Stouffville continue to be desirable neighbourhoods reflected in the strength of home prices in those communities.
It is encouraging to see April with a strong year-over-year increase in new listings. If we continue to see new listing growth outpace sales growth, we will start to see more balanced market conditions.
As of April 2017, the Toronto Real Estate Board had 1.1 months of inventory. Meaning it would take 1.1 months to sell every home on the market should no new listings be added. A market is considered balanced when it has 5-7 months of inventory and prices have stabilized. The substantial pent-up demand built over the past two years will likely take months to unwind.
In August of 2016 Vancouver introduced a 15% Foreign Buyers Tax and the volume of sales declined as inventory grew. All of which resulted in 5-10% price decline in the mid to higher end of the market. Fast forward to Vancouver today and the city is sitting at 2.5 months of inventory and has started rebounding. The overall balanced effect that has occurred has allowed buyers a wider selection of homes and the ability to buy without the immense stress of competing with several other buyers at the same time.
What Does This All Mean?
Prior to the New Housing Measures being implemented we witnessed for 6 weeks the accumulation of new listings due to intense media coverage leading up to the announcement. The market place is presently experiencing downward pressure on price because of the added levels of inventory. I feel that over the short term buyers will have an opportunity to take advantage of some very good buys. However if any buyers hesitate too long the market will rebound and they will have missed the boat. The Vancouver market is the best example to help predict the future of the Toronto market. We are presently witnessing Vancouver recovering only 9 months after the Foreign Buyers Tax was introduced there. Just like many Sellers missed the boat on the peak real estate market in Toronto (January-March 2017) I suspect many buyers will also, as they sit on the sidelines. It is only the brave of heart that will take action and I encourage any buyers in the market to seek the guidance of a seasoned real estate agent.