16 June 2021 ~ 0 Comments

What to make of the decline in May’s monthly sales

Historically speaking, the month of May on average has been the strongest for sales activity throughout the Toronto Regional Real Estate Board. 

Before entry level condos became the mainstream option for first time buyers to afford a place to own on their own, we had a real estate market that was truly quite seasonal in nature. 

January through mid-March would be on the slow side, picking up steam with the onset of what we call the spring real estate market. And since houses were the dominant form of real estate being transacted, it was understandable that the bulk of the selling seasons followed those looking to buy a house. And many of these buyers were families. 

The theory being that the preferred choice would be a closing on the sale of the current home and back then coinciding with the purchase of the new home (yes that actually used to be the thing!) the preference was for an end of June or sometime in July closing, since families were often involved. This would give everyone time to finish up the current school year with minimal distractions, and allow for ample time to settle into the new home over summer break and before the upcoming school year.

And the month of May was the pinnacle of when that sweet spot of finding a new home and then selling the current home was met. Of course it wouldn’t always be timed perfectly and you would get the purchase in April and possibly the sale side in June. Add them all up and and voila, you get the busy spring market.

So what happened this May? Well, sales were pretty good with 11,951 happening in the GTA. But, it wasn’t the most active month so far in 2021. That title currently is held by the month of March at 15,646 sales. 

I’ve been writing oneover the past few monthly newsletters about the torrid pace of sales happening in 2021 in the first quarter, now nearing on the first half. I’ve never seen the market being busier transaction total wise. But this May has nothing to be ashamed about. It’s still the second best May on record over the past seven years, and not to far off the record may mark set back in 2016 with 12,790 sales. 

So what do I make of the decline in May. Nothing much for now. Eventually things will settle down and a new balance will be had in the GTA. You must remember that if you are a buyer or a seller, often you are only laser focussed on what’s happening in the market for a time leading up to your purchase or sale, and then a few months afterwards. But the bigger picture is where you lean into me and I lend my expertise to the greater goings on. 

Average prices are still up month over month (May from April) in all categories except a slight decline in the condo market. But condos are a more diverse class as there are tiny little small ones, and very luxurious expensive ones. The more affordable side of the condo market has been active and that will level off the averages a bit. 

June’s activity will be a tell and then that of July. We’ll have a better sense once the reopening takes effect if this years real estate market was truly front loaded or not. Stay tuned. 

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