It’s quite fascinating to witness what’s happening in the marketplace. Walk down any street and you’re likely to see an abundance of sold signs. The number of appointments for our listings are up, the number of multiple offers on well-priced homes are up, the days a home sits on the market is down, and prices continue to rise in the face of increased demand.
Every bit of feedback I’m receiving from our sales team continues to be about lack of supply and the lack of choice. While we were never technically out of a seller’s market, it had become a bit of a stalemate market, five or six months ago, where buyers and sellers were sitting. Now we’re at a point where the buyers have officially come off the sidelines.
Unfortunately, not all sellers have. And because of that, we have roughly 40 days of housing supply in the GTA. That means, at the current rate of sales, there would be nothing on the market in 40 days in the absence of new listings. So, to say we’re returned to a seller’s market is an understatement.
That said, I think it’s important to distinguish between a macro and micro-analysis and remind you that not all neighbourhoods and not all price points behave in the same manner. For example, the sale of luxury homes continues to account for a smaller share of total sales than they did in the early months of 2022. Though sales activity is up, we continue to see homes priced north of $3 and $4 million sitting longer than more affordable alternatives.
Looking a little closer at price, this May, 8.2% of all sales transactions were over $2million. This is up from 7.25% in April and 6.5% in March, but that stat was over 10% a year earlier. This April, there were less than 25 sales over $5M on the MLS…in May, that’s risen to 44. We are beginning to see more interest in ultra-luxury homes than we saw in the first quarter of 2023, when fewer than 35 homes sold for over $5M, but this remains a small portion of the overall market.
Heading into summer, it’s tough to project what will happen to the housing market and none of us have a crystal ball. However, with inventory being so low, this will generally put upward pressure on home prices.
Personally, I’m less interested in rising prices than I am in total sales. But sometimes you need higher prices to get sellers to engage in the market. So, I am hopeful that increased prices will bring more homes to market, and that buyers will have better choice moving forward as they look for the right home in their preferred neighbourhood.
As always, I would encourage anyone reading this to reach out to me at (416) 723-2383, or to contact a member of the Harvey Kalles sales team. We will be happy to provide clarity around what’s happening within the current real estate environment. We have been in business since 1957 and bring a wealth of experience to fluctuating markets.
