This time last year, the Toronto real estate market looked very different. We were just weeks away from its pandemic peak — when home prices were sky-high, the benchmark interest rate was at a sustained decades-long low and demand for residential property far outpaced supply.
These days, only one of those things remains true (it’s that there’s more demand than supply, which we’ll get into in greater detail below). But despite the recent barrage of less-than-promising headlines about the state of home sales, here at Heaps Estrin, we believe there’s reason to be cautiously optimistic about the spring real estate market, particularly in Central Toronto.
Reported home sales and prices are down year over year — by a lot.
According to the latest data from the Toronto Regional Real Estate Board, Central Toronto home sales dropped by 33% last month compared to January 2022, while the average sale price dropped by a quarter in that same period. But a decrease from last year’s record-hot market to the more conservative landscape of today isn’t surprising.
Remember, the Bank of Canada’s benchmark interest rate is currently sitting at 4.5%, but in January 2020, it was just 0.25% — a change that has meaningfully impacted home affordability across the country.
Still, when you compare January’s home sales to December 2022, the difference is much less significant, though we did experience a slight drop of 3% month-over-month. Nevertheless, we do expect to see an increase in sales volume in the coming weeks.
We saw sales pick up toward the end of the month — a trend that’s expected to continue.
“The numbers we’re seeing for January are not reflective of what we’re seeing in real time in the central core of the market. In fact, of the offers our team has done in the last few weeks the majority had multiple offers and sold within days,” said Cailey Heaps, President & CEO of The Heaps Estrin Team.
Most notably, 115 Inglewood Drive, a 4-bed, 5-bath detached home in Moore Park that was listed for $3,450,000, sold in 2 days and for 103% of list price with multiple offers. Meanwhile, a $10,000,000+ off-market listing in South Hill represented by our team also attracted multiple offers and sold for approximately 10% more than list price late last month.
While we can’t say that bidding wars are back to stay, these deals — which we’ve seen continue into the beginning of February — send a positive signal about the months ahead.
Demand continues to outpace supply, resulting in fewer days on market.
The good news for sellers is that the Central Toronto market has no shortage of interested buyers.
Yes, the number of home sales in the area is lower than it was last year and even last month, but that’s a result of the lack of inventory rather than a lack of interest. Open houses are picking back up as would-be buyers rush to get into new listings as soon as possible. And homes are starting to sell faster — detached homes in Central Toronto sold 28% faster in January than December.
As Cailey Heaps explains: “Another indicator of the market picking up has been the number of booked showings, which have gone up exponentially since last fall. At that time, we might have had five showings a week on a home but now we’re seeing upwards of 30, meaning there are definitely more buyers in the market. This is also true within the high-end of the market. I believe the central core of Toronto is leading the return to stability in the market.”