With everything that has happened in 2020, you'd think housing markets would be behaving like little lambs. Flying along under the radar, the markets have been lions! Especially the Toronto Market. Just crunching some numbers from the most recent Market Stats from the Toronto Regional Real Estate Board, and they will surprise the Housing Bears for sure.
Did you know that if there were ZERO sales for the entire Toronto Regional Real Estate Board in the month of 2020, we would still finish the year as the sixth best year in Toronto Real Estate Board History? With the way things unfolded this year, I'm sure everyone would be extremely happy with a top 10 finish!! However, December continues to show that it will pad the 2020 numbers. I'm going to predict a very conservative 18% increase for December 2020, assuming things will quiet down as buyers and sellers pause for some quality family time by the 20th of the month. That 18% increase over last December (4,364) will see another 5,149 sales and in turn 2020 sales will finish at 93,175. THAT number puts as as the THIRD busiest year in Toronto Real Estate Board History!! THIRD Busiest!!!
Now, think about this. Average price on January 1st, 2020 was $819,288. On December 1, 2020, the Average Price sits at $929,433. December pricing always comes in a bit lower, and we should see the average price finish around $920k. That's a $100,000 increase in Average Price!! No, prices did not rise $100,000 across the board. There was a huge shift in the mix this year due to people leaving smaller spaces to purchase larger homes/lots. This gives you the perception that average price increased a lot, however when comparing similar properties to each other, you'll see it's not as bad as the "average" increase shows. Remember when they blamed the double digit average price increases on foreign buyers? Our border has been closed for three quarters of the year. This is pretty much all domestic activity. The solution is NOT going to be foreign buyer taxes, or vacancy taxes. The solution is going to be an increase in supply. The supply issue will continue to hurt affordability for a few years. If the borders open up in 2021, look for demand to drive average price up even more.
I'm predicting a modest 8% increase in sales activity for 2021. It will remain a strong sellers' market, and if we don't get adequate supply next year to meet the increase in demand, it will be a frustrating year for buyers.
Sure, the 2020 market may have been thought of as a lamb, but it sure did start and finish like a lion. As 2021 comes in, the market will continue to roar! Advice to both buyers and sellers, jump on the market early and you'll save on the frustrations that will plague many as the market heats up over the year.