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Monthly Market Updates

Toronto Real Estate Market Report – June 2020

I think the crystal ball is broken!?!

At the beginning of 2020, all predictions pointed towards a record-setting year. Then COVID happened, and opinions reversed. The lockdowns in April severely skewed the numbers and it wasn’t until the middle of May that we started to see a return to (a new) normal.

June took that momentum and shattered several records for the month! We recorded a historic high for average prices in the city at $930,000 – beating the 2017 record of $920,000. We also saw sales double in June (compared to the month prior) and on average saw properties sell 18% quicker than last month.

The highs continued for the Detached, Semi-Detached and Townhome markets, all recording record-breaking prices for the month. Semi’s and Townhomes hit all-time highs of $1,287,832 and $855,399 respectively.  In the detached market, we hit a new year high, and return to 2017 prices with an average price of $1,523,770.

Condos didn’t fare as well as the other housing segments. We did see a 77% increase in sales for condos in June, but the average price was nearly identical to May with an average price of $672,000 – which takes us back to the numbers we were seeing at the start of the year.

It’s important to remember, we’re still very much in the midst of a global pandemic. One promising month in June does mean the worse is behind us. I think a lot of the growth we saw last month can be attributed to the lack of activity we saw in months prior. I’m most curious to see what the employment landscape looks like in the Fall, and how business can adapt in months ahead.

DETACHED HOUSES

  • 894 sales took place
  • 462 more homes than the previous month (107% increase in sales)
  • 101 fewer homes than the previous year (10% decline in sales)
  • The average price of a detached home was $1,523,770
  • An increase of $101,497 compared to the previous month (7% increase in price)
  • An increase of $191,131 compared to the previous year (14% increase in price)

SEMI-DETACHED HOUSES

  • 263 sales took place
  • 99 more homes than the previous month (60% increase in sales)
  • 70 fewer homes than the previous year (21% decline in sales)

  • The average price was $1,287,832
  • An increase of $144,510 compared to the previous month (12% increase in price)
  • An increase of $232,409 compared to the previous year (22% increase in price)

TOWNHOUSES

  • 364 sales took place
  • 200 more homes than the previous month (121% increase in sales)
  • 8 more homes than the previous year (2% increase in sales)
  • The average price was $855,339
  • An increase of $60,713 compared to the previous month (7% increase in price)
  • An increase of $45,300 compared to the previous year (5% increase in price)

CONDOS

  • 1,287 sales took place
  • 560 more condos than the previous month (77% increase in sales)
  • 210 fewer condos than the previous year (14% decline in sales)
  • The average price was $672,465
  • A decrease of $1,563 compared to the previous month (.23% decrease in price)
  • An increase of $35,859 compared to the previous year (5% increase in price)

TRENDS TO WATCH

  1. Condo prices are starting to level off. I’ve been seeing less bidding wars for them and more supply in the market. We’ll be watching to see what happens to values in July and if they continue to remain the same.

  2. Rents continue to plummet, especially in the condo market. Long gone are the days of multiple offers for rentals. As many AirBnB owners shift to the longer-term market, supply has dramatically increased pushing prices down.

  3. Were the record-setting prices a result of pent-up of demand? Will prices cool off in the traditionally slow summer months? With fewer people travelling, it’ll be interesting to see the impact this has on the Real Estate Market in Toronto.
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Advice For Buyers Advice For Sellers Video Blog

There Needs To Be More Transparency with Real Estate Bidding Wars

We need to change the bidding war process in Toronto! If you’ve tried to buy a home in recent years, you know how backwards the current process is…If you haven’t, let me explain.

The Current System

A seller will list their property below market values to create a frenzy amongst buyers.  After roughly 7 days of market exposure, they’ll review and all offers that come to the table.  The problem is that each buyer is going in “blind” not knowing anything about the other offers.

Current rules, as set by the Real Estate and Business Broker Act, say we can not disclose the motivation, offer, or price of a competing offer. Thus creating a blind bidding system full of suspicion and mistrust.

The winning buyer always feels like they paid too much, the losing buyers feel like they could have paid a bit more and the sellers could regret the highest bid if the winning buyer can’t secure the financing. Plus it artificially increases values as going in blind can create an over inflated offer.

How We Can Fix It

Simple – get rid of the blind bid system and open up the process. Let each party know the Price, Deposit and Closing date of the other offers. This levels the playing field. There still will only be one winner and several losers, but atlas both parties would fairly know what they were up against, in a more transparent system and enjoyable process.

Good News

OREA is seeking feedback on whether it should push the provincial government into modernizing the real estate industry to make it more transparent. Australia is already doing this – and even opening up their MLS to sold prices (more on that in another video). In Melbourne, they littering gather infront of the house on a offer day and each party bids infront of each other. This is the most transparent way to know what you’re up against.