With the focus of back to school behind us, the fall real estate market unofficially returns. Cherishing the last few days of summer that lie ahead before the leaves start to change colour, many people looking to buy or sell, anxiously await what direction the Toronto real estate market is heading?
 
Let’s take a look back on what’s been happening since February 2022, when most people feel the Toronto real estate market peaked on pricing. 
 
Looking at Detached homes in February, the average price in Toronto was roughly $2,074,000. There were only 8727 properties of all types (semi-detached, townhouse and condo) available and the average days on market was 19 days to sale. 
 
Fast forward to July and the average price had dropped to $1,515,763. The months in between saw gradual declines (with the exception of April which saw a slight increase) with the biggest drop being between June and July.  Active listings also jumped to 15,334 properties and days on market averaged 29 days for solds.
 
Were interest rates the reason to blame? Afterall, we saw a 1.5% increase in the bank of Canada rate in June and July alone. This certainly had a large affect. An equal and maybe more plausible argument could be made by saying that house prices were increasing at way to fast of a rate since fall of 2021, which I had noted in earlier newsletters. 
 
September 7^th is the next interest rate date and I’ve read an increase anywhere between 0.50-1.00 basis points could be on the table. What would this do to interest rates and house prices?
 
Activity (sales) numbers are way off and have been rapidly declining since March. It needs to be noted that 2021 was a record year for sales, and by a hefty margin. The yearly average of sales before 2021 was approximately 92,000. 2021 it was 121,649. A massive increase above the average.
 
Activity was bound to come down and low interest rates helped propel pricing to the sky-high values in the market. 
 
August numbers are never anything to write home about, being a month of family vacations and summertime fun. With the exception of August 2021 of course. So, this August’s numbers are interesting in that the average detached price increased over July’s average to $1,648,298. Sales of detached homes also increased as well as condos. Is this an anomaly or an indicator that prices may hang on or tread back up in the fall?
 
September will be the month that tells the story on how the rest of 2022 will fare, as well as early 2023. Will there be a hefty BOC rate increase? What will happen with the remaining two BOC announcement dates? Will the typically strong fall market show up? Stay tuned.