Monday, August 10th, eh?

2020.

Years from now, the mere mention of “2020” will give us all goosebumps.

In previous years, hitting August 10th on the real estate calendar would just about spell the start of the annual summer slowdown.  The last two weeks of August are typically quite slow, and even I would look forward to a slower pace.

In 2020, this couldn’t possibly be more to the contrary.

Having just moved three listings last week, we’re gearing up for another three in the next two weeks.  I had one seller all set to rush to market for August 25th, but their conditional sale of a Guelph home fell through.  Yes, another Toronto home-owner leaving the city.  Their time won’t be this month, but it will be soon.

The interesting part about that last seller, and the conversation that ensued, was that we were going to move heaven and earth to get the property ready for staging on August 21st, so we could list on the 25th, review offers on the 31st, all so we could avoid listing after Labour Day.

Avoid listing after Labour Day?  What the?

Yes, I know, this is new for 2020.  In years past, I would be advising sellers to wait until after Labour Day.  But this year, I see a dearth of inventory in the freehold market on the horizon in August, and buyer demand is still high.  With the annual dump of listings post-Labour Day, I think it’s advantageous for some sellers to hit the market now.

Last Tuesday, I provided my “Five Burning Questions” with respect to the July TREB numbers, looking at five statistics that I was eager to review.

One was with respect to the overall average home price, three had to do with condos in some way, shape, or form, and one was looking at entry-level freehold.

While I could go over any number of stats from last month, I figured it would make sense to actually answer those five questions, since that might provide some insight into how the market reality is lining up with the vibe, the anxiety, the prognostications, and the buyer and seller sentiments out there.

Let me go back to the five questions, and then provide a few more observations.

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1) Where will the GTA average home price go?

We don’t need to re-hash the “who said what” with respect to this metric, since I’ve already burnt that house down a few times.

With the average home price setting a record in June, coming in at $930,710, I was eager to see not only if this record price would hold, but also if it would increase.

Bulls, rejoice.

Bears, find your next excuse…

A modest 1.4% gain isn’t much to write home about, although, if you experienced this every month you’d be looking at a 16.8% annualized return, so perhaps this is significant.

Prices did hold, but more importantly, they went up.

Some might suggest that a 1.4% increase in price from June to July is meaningless, but to those, I would provide this chart:

Yep.  This could have something to do with the pandemic.

Or?

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2) Where will the 416 average condo price go?

After I wrote Tuesday’s blog, I had a few very difficult conversations with condo sellers.

I did one price reduction last week, one seller wanted to stay put, and one went dark on me.

For those sellers who are preparing to list in the fall, I’m being brutally honest about the market out there right now, and the following three points will shed some light on where things are.

First, we’ll continue this graphic from Tuesday:

A modest increase from June, which is nice.

But still a way to go in terms of pulling even with pre-pandemic prices.

I actually lost a bid last week for a west-end condo townhouse where there were five offers, and the sale price obliterated the previous record.

The market is spotty out there, to say the least.

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3) What’s happening with downtown condo inventory?

Tuesday’s blog showed us that inventory is through the roof, whether we’re looking month-over-month or year-over-year.

The trend did not turn course in July, it would seem:

New condo listings in C01 & C08 increased from 1,483 to 1,744 – an increase of 17.6%.

To put this in context, new listings in the same period in 2019 increased by 0.2%, or in absolute terms, by two.  Two listings.

The only way this is not a problem is if the number of sales went up by more than 17.6%.   More on that in point #4…

As far as the month of July goes, the 1,744 new listings stuck out like a sore thumb:

How about twice as many new listings in 2020 than in 2019?  Yikes.

I ran this same state for the month of June in Tuesday’s blog, and it looked something like this, but not quite as overblown in 2020.

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4) What’s happening with downtown condo sales?

Well, believe it or not, sales are up on a relative basis, more than new listings!

From 468 in June to 604 in July – an increase of 29.1%.

That’s more than the 17.6% increase in new listings, so it seems to reason that the “Sales to New Listings” ratio will have tightened, ever-so-slightly.

Here’s how that looks:

But once again, we can’t really rejoice in that 3.0% uptick in the SNLR from June to July for too long before we look over and see that in July of 2019, the SNLR 5.6%.

It would seem that summer is usually a tight time for condo inventory, I suppose.

Call this a wash, year-over-year, if you want.

I would conclude that the condo market was healthier in July than it was in June.  Disagree if you’d like, and please provide your rationale.

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5) What’s happening with entry-level freehold?

This is very interesting.

And this makes absolutely zero sense to me.

But I can’t have it both ways.  I can’t suggest that this one statistic is to be thrown out the window, but all others are to be taken at face value…

There is absolutely, positively, no way that this makes sense.  There’s no way that the average semi-detached price could have gone down by 8.3% from June to July.

Semi-detached prices went up last month, and yet this statistic says the complete opposite.

I had an east-end listing on the market last week.  I appraised this for the owner for $1,200,000 in February, hoping to get $1,250,000.  Prices dropped through the pandemic in March and April, as we know, and then came back.  So when we went to market last month, I was hoping for $1,300,000.

We sold for $1,375,000.

Active buyers and agents who are reading this, tell me I’m wrong – but semi prices did not go down last month in the 416.

I dunno.  Maybe a whole slew of $5M semi’s in The Annex sold in June.

I can’t figure this one out.

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Other observations of note for the month:

1) Average Days On Market

This is a stat we rarely talk about, and for good reason: it’s boring.

It’s also a stat that’s fudged a lot, since agents can terminate a listing that’s been out for 30 days, then re-list, sell it in two days, and it shows up as “2 days on market” in a sale figure.

But on the whole, month-to-month, year-to-year, and apples-to-apples, it holds water.

TREB has come up with two definitions for DOM as of this year:

Average Listing Days on Market (Avg. LDOM) refers to the average number of days sold listings were on the market.

Average Property Days on Market (Avg. PDOM) refers to the average number of days a property was on the market before
selling irrespective of whether the property was listed more than once by the same combination of seller and brokerage during
the original listing contract period.

For the month of July, compared to 2019:

LDOM:  –26.1%
ADOM: -24.2%

Properties are selling much faster than in the summer of 2019, and we can all feel it.  The numbers agree.

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2) Detached Is King In The 905

Year-over-year, detached sales in July were up 29.5%, from 8,555 in 2019 to 11,081.

In the 416, detached sales increased by 27.5%.

But detached sales were way, way out ahead in the 905, increasing a whopping 48.3%

How does one explain this?

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3) Luxury Sales Are Up

It still bothers me that TREB considers the highest price bracket to be $2,000,000+, which is ridiculous since “luxury” should really be $4,000,000 or more, but I digress…

Nevertheless, those $2M sales are up significantly both month-over-month and year-over-year:

July, 2020: 452
June, 2020: 365
+23.8%

July, 2020: 452
July, 2019: 183
+147%

I was speaking with a friend who works in personal finance and investments, and his contention is that the ultra-luxury market isn’t moving.  He said, “The Chinese and the Middle East buyers aren’t out there.  Nobody’s bidding on $6M houses right now.  Without those two subsets of buyers in the market, properties aren’t going to move.”

Looking only at the 416, I found the following data for sales over $4,000,000:

Month-over-Month:

July, 2020: 28 sales
June, 2020: 30 sales

Year-over-Year:

July, 2020: 28 sales
July, 2019: 15 sales

I would therefore conclude that the “luxury” market, whether over $2M or over $4M, is doing well.

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4) Toronto & York Are Trailing

Out of the seven TREB “regions,” would you ever have guessed that the two regions in last and second-last place in terms of SNLR are the two largest?

This was surprising:

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Well, folks, that was enjoyable for me!

The day that the TREB stats are released is sort of like the day that new PWCC hockey card auctions come alive in the second week of every month, except the former doesn’t cost me any money…

They’re both rather enjoyable, however, in similar ways.  Something about the thrill of the chase, and the element of surprise, I suppose.

Any predictions for August, or are we all tuckered out?