Last month, the Toronto real estate market apparently decided to give the illusion of a comeback, with sales seeing an uptick compared to the ghost town vibe of January 2023.
I expect this theme to continue for much of 2024. Given that 2023 was a record-low year, every month in 2024 will likely look like a big improvement on a year-over-year basis.
The real estate industry will certainly grab hold of these year-over-year data points for a bullish narrative, but looking at the monthly context to establish a trend is also important.
The monthly context
Most notably, prices fell from December into January, which very rarely happens. According to GTA realtor Vassil Staykov on X, this has only happened two other times in the last 16 years (2009 and 2019). His analysis shows that we typically start the year with an increase in median price of about 2 per cent.
Let’s establish two key facts for context when looking at the key trends ahead:
- December was relatively strong and saw a very atypical jump from November in price and sales volume.
- 2023 was a very weak year for price growth and sales volume, touching a 23-year record low number of sales.
When we look at the annual context, things will likely look good all year. But what has happened since last month? Let’s take a look.
New listings jumped up from December to January. This is a common trend, given that many listings are set to expire on December 31 and are often re-listed in January.
The January listing increase is slightly larger than last year:
The number of sales increased about 10-16 per cent across the GTA, which is typical from December to January:
Sales to new listings decreased after a big jump up was observed in December. The market showed signs of returning to a sellers’ market toward the end of the year, but supply outpaced demand a bit to begin 2024, so we’re back in balanced market territory.
This excess supply could be a result of re-lists, so we’ll have to wait until the spring market is in full swing to understand market balance:
Days on market (DOM)
DOM continues its uptrend, with listings spending more time on the market than they have in the last three years. Should this trend continue, it could project a spring market that’s balanced or turning in favour of buyers, as new listings could begin to pile up against a slower absorption period.
This seems to be in line with the more cautious buyer who is apparently re-entering the market from the sidelines after a volatile few years in GTA real estate:
Average prices fell from December to January in all GTA markets except for Durham, while median prices fell in Toronto, Halton and York from last month, and rose in Durham and Peel:
Sale-to-list price ratio
The sale-to-list price ratio tightened into the 98-99 per cent range from 95-98 per cent in December.
This is in line with industry anecdotes that say we’re seeing an increase in multiple offers, but not a meaningful increase in bids over asking price: