My Father introduced me to The Doors at an early age.

And by early, I don’t mean when most kids would be able to absorb something as intense as Jim Morrison, like, say, eighteen-years-old.

I think I was like seven.

During our weekend escapades to sports-card and memorabilia shows all over the Golden Horseshoe, we would explore a host of musical acts from yesteryear such as the Rolling Stones, Beach Boys, Van Morrison, Creedence Clearwater Revival, Pink Floyd, and you can only imagine what else.

From about age seven or eight, I was pretty smitten with The Doors.

“Break On Through” is about as good as it gets

“Light My Fire” is epic, albeit lengthy, but it’s their best song.

“Roadhouse Blues” is my all-time favourite; something I share with my daughter now.

But the song, “The End” would both enlighten me and scare the living hell out of me at the very same time.

This is the end, beautiful friend
This is the end, my only friend
The end of our elaborate plans
The end of everything that stands

My father explained that Jim Morrison was more of a poet than anything else.  Yes, he was a musician, but not like a drummer or a bassist.  In fact, Morrison never played an instrument with the band, save for banging a tambourine or shaking a maraca.

Read the lyrics to “The End.”  They’ll confuse you but they’ll probably scare you.

We didn’t have Google when I was seven or eight, so I had to transcribe the lyrics in a notepad while listening to the song in my dad’s Buick.

“The End” is often associated with Apocolypse Now because the song is playing during the final scene where (spoiler alert!) Martin Sheen has an, er, um, “meeting” with Marlon Brando.

But there’s a lot more to the song.  It’s a poem.  It has an unlimited number of possible meanings, from anti-war sentiments, to statements on society, to thoughts on a break-up, to early childhood experiences, and more.

Some of the best songs are those that have an indiscernible meaning.  Every listener can feel something different or take something different away.

When I think of the song, all I can hear are those scary notes at the start of the song and a build-up to Morrison saying, “….this is the end…”

It became a running joke in my family.

“This is the end….”

And to this day, I find myself using this line colloquially in many walks of life.

Leaving the office for the day?

“This is the end….”

Kansas City intercepts Denver late in the fourth quarter?

“This is the end…”

Leaving Dad’s place after a joyous dinner on Boxing Day?

“This is the end…”

I say it in jest since the words echoed by Jim Morrison himself were almost haunting, so it’s almost sarcastic in nature.

When we approached December 31st, I couldn’t help but think of those words.

“This is the end…”

Not in the same haunting way, but almost welcoming.

As short-lived, one-hit-wonder, Semisonic said in 1999, “Every new beginning comes from some other beginning’s end…”

I had a wonderful time over the winter holidays, but after Christmas morning, and two family dinners, and the three or four days that followed, I was ready to say goodbye to 2022.

“This is the end…”

2022 was an odd year in our real estate market as we have now discussed to death, and beyond.  And as we turned the page on the year, I was happy to see it in the rear-view mirror.

“This is the end…”

As I sat down to reflect on 2022, write some blogs for the year ahead, and think about the real estate market and what to expect, I suddenly became optimistic.

All I’m reading out there right now is negativity.  I know that it sells, and I know that uncertainty can lead to fear, but my optimism is based on the fact that I truly think December will mark the end of this decline in home prices in Toronto.

Yes, truly, I believe that “This is the end…”

I’ve always said that you can’t put too much stock into December market stats, but let’s take a look at the month that was, just to see if we maybe, possibly, potentially, kinda, naively think we could have hit market bottom.

Here’s a refresher on the TRREB average home price:

As we know, the average home price in the GTA increased 7.3% and 7.4% in January and February, peaking at $1,334,554, and subsequently declining thereafter.

We saw a stable market in the late summer and into the fall where the average home price remained between about $1,075,000 – $1,090,000 for five months.

And in December, we saw a 2.6% decline which now brings us all the way down to $1,051,216.

But that was to be expected, right?

What did I say in THIS blog about the November stats, written on December 7th?

“I expect the month of December to be the slowest yet.  We could see 3,500 sales, a decline to an average price of $1,050,000 (remember, you can’t take a December price as any indication of where the market is), and new listings could drop to 6,000.”

So that December price isn’t anything to be surprised by.

But I won’t lie; I had some help with that prediction.

The average decline from November to December in the last two decades, on average, is 2.8%.

And the average home price has declined from November to December every year except 2010:

The question now becomes: does the market bounce back?

Using the same idea, let’s look at how December has led into January during the same time period:

Surprisingly, the average home price has decreased in seven of the previous twenty years.

Could have fooled me!

On average, we’ve seen a 1.0% increase in the years 2002-03 through 2021-22.

So even if we were in a strong market, there’s no guarantee we would witness a significant increase into January.

Personally, I think the market has to increase.  December was depressed; the home price dropped 2.6% from November.  We saw a level of stability for five months that was real.

But on the other hand, the luxury market in January is non-existent and I haven’t seen many sales in the $2M+ range thus far.  So if only the lower-end is trading, we could see the average home price drop to just over $1,000,000.

As for sales, the media spent last week discussing the 48.2% drop in year-over-year sales volume, from 6,013 sales in December of 2021 to a mere 3,117 in December of 2022.

That’s significant!

But the year-over-year drop in November was 49.4% and in October it was 49.1%.

So it seems like the market was where we should have expected it.

Month-over-month, we saw a decline from the paltry 4,544 sales in November to the paltry 3,117 in December.  That’s a drop of 31.4% and not insignificant.

But again, if we look at historical precedence, we see that this too is pretty much as expected:

Kind of amazing that sales have declined every single year from 2002 through 2022, right?  I mean, there’s not even one outlier?

Say what you want about the market in late 2022, but to me, it seems that December was pretty much as expected.

It wasn’t busy but it wasn’t slow either.

And the relationship between sales and new listings was, again, as expected.

I looked at Halton, Peel, Toronto, York, and Durham all separately and the sales-to-new-listings ratio were within a pretty tight band:

Peel: 71.5%
Toronto: 77.0%
York: 77.4%
Halton: 79.4%
Durham: 83.0%

Peel and Durham are bookending three very similar ratios in Toronto, York, and Halton.

And while these SNLR’s are all down significantly from what we saw in December of 2020 and 2021, they continue to move as the market has before.

Check this out:

As I said, December’s SNLR in 2020 and 2021 were in the 120% range and 2022 was “only” 80%.  But the trend of seeing a huge spike in SNLR from Sept/Oct/Nov into December continued regardless.

With every metric I see, the market is doing what it’s supposed to do – within that immediate market cycle.

This obviously isn’t to argue that the market hasn’t declined from 2020 and 2021, or even the first half of 2022.  This is to argue that the market does not appear to be continuing its decline.

It might cause me to state the obvious, based on my title and introduction:

“This is the end…”

We’ve seen everything fall off: prices, sales, and inventory – but not to the same extent, which shows that even the proportion of listings-to-sales has changed in a bullish nature.  But how long it will continue to fall is a question that everybody’s asking, and I, for one, believe we might be at the end.

“This is the end…..maybe…”

Everywhere you look, there are newspaper articles about the “continuing” market decline.

It’s the usual culprits that are leading the charge:

“Toronto Home Prices Keep On Sliding And Experts Say It Will Only Get Worse”
BlogTO

But these articles are what many people want to read.

Those that hope for a decline are more likely to click that link than a headline showing optimism.

And even those who own a home and/or want to make a move-up are still more likely to click that link because negativity sells.

But not everybody is banging that drum…

“‘The Decline’s Already Happened:’ Why Royal LePage Thinks Home Prices Will Flatten Out In 2023′”
Financial Post
January 13th, 2023

On Saturday, I toured Toronto with an American who is planning his family’s move in the next eighteen months.

Eighteen months is what one might call “short-term” in any market cycle, but for people in Toronto who watch the market like day-traders, and who live on month-to-month stories and data, eighteen months is long-term.

I told him, “The GTA market is down 20% on average, with some suburbs down 30%, and the areas you’re looking in midtown, probably down 10%.”

He said, “Well, that’s all relative.  We have to sell our house down south, there’s the US/CAD exchange that fluctuates, plus we could move in two months or in two years.”

That was a refreshing take, considering we live in a city where people are literally holding off home-buying plans today because they feel the average home price could be 3% lower in September.

I explained where we were in the market in February versus the summer, fall, and today, and then I told him what I told you above:

“This is the end…”

Probably.

And if I’m wrong on that, “the end” is, what, another 3-5%?

Tell me the market is going to drop another 20%, that’s fine.  I’ve been hearing that the 50% drop is coming since before prices rose 250%….

Tell me about Canada-wide prices, or use a metric that incorporates areas of extreme weakness, but do keep in mind I’m talking about Toronto.  And as is the case for most people who read this blog, we’re usually talking about the 416 and the immediately surrounding area.

Those investor-driven, pre-con townhouses in York Region that doubled in value/price in 24 months aren’t what I’m concerned about.

I do think, as noted above, that January & February could show a decline in average home price because nobody is listing luxury homes right now.  But I believe the March/April/May/June market will show a market moving primarily sideways, with an average home price no lower than what we saw at the end of 2022.

And when all is said and done, I think we’ll look back at December as the true “end” to the market decline.

Sidenote here: I’ve actually never seen the movie “The Doors” with Val Kilmer as Jim Morrison.  I see it’s on Amazon Prime Video.  Well, I’ve got my Saturday night planned…