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The Toronto real estate market statistics for October 2022 have just been released. Here are 5 things you need to know:
1 – There’s a whole lot of ‘wait and see’ going on.
In October 2022, there were 49% fewer homes sold than in October 2021. That’s the eighth month in a row where sales volume decreased significantly.
Between January and October 2022, 67,559 sales were recorded, compared to 106,745 during the same period in 2021.
Future buyers and sellers continue to watch and wait through these months of uncertainty…what will happen to interest rates? Will home prices decrease more? Are we headed for a recession?
But there ARE still people buying homes…almost 5,000 sales were recorded in October. In our experience, the people buying right now tend to fall into one of these categories:
- First-time home buyers who want to capitalize on the lower prices and the lack of competition.
- Smart upgraders who realize how much they stand to gain in the differential: while the price of their existing downtown condo is 10% lower than it would have been in February, the price of the detached home they want has decreased by 22% during that same time.
- Cash buyers! If you don’t need a mortgage, you benefit from lower prices without the negative impact of higher interest rates.
- Lifestyle movers: new parents, empty nesters, divorcees, people moving to the city, people moving out of the city…
2. Price, Price, Price is the new Location, Location, Location.
What was key to selling in October 2022? Being priced at October 2022 market value!
In Toronto, the average home sold for 98% of the asking price in October – around $20,000 under the asking price.
There are SO many overpriced homes listed for sale on the MLS right now. If your home is listed for sale and not selling, are you priced at the current market value or are you still hoping for February prices?
Truth: Most buyers won’t even bother to schedule a showing if they think you’re overpriced. In their minds: Overpriced Listing = Unreasonable Seller = Next!
3. Prices are stabilizing – the average price was flat in October vs. September.
While the Toronto real estate market has been in flux for 8 months now, prices have been relatively flat since the summer. While average prices in the GTA are still down 18.2% from the February 2022 peak, they haven’t changed much since July:
Average Home Prices in the GTA:
So despite what some media headlines might want you to believe, the Toronto real estate market is NOT in freefall. We’ve been back to July 2021 prices for a few months now – back to before things went completely bananas when we started to come out of our covid shells.
4. There’s not a lot of inventory.
In October 2022, the number of new listings was down 12% compared to October 2021. While today’s buyers generally don’t have to compete in bidding wars, it’s still a frustrating time to be a buyer in the GTA – there isn’t much to choose from (though there are plenty of overpriced properties sitting on the market).
Low inventory is good news in a shifting market because it means we aren’t seeing a flood of desperate sellers who can no longer afford their mortgages and need to sell. The low supply of homes for sale coupled with continued buyer demand is one of the reasons we saw no real change in prices from September to October and continue to be, technically, in a “seller’s market”.
5. All property types are not created equal.
Here’s how prices have changed by type of property:
|Oct 2022 vs Feb 2022||Oct 2022 vs Oct 2021|
No surprise; this pretty much mirrors the way prices increased during the crazy COVID months.
So what’s next?
On October 26, the Bank of Canada increased the overnight interest rate by 0.5% (though most economists expected an increase of 0.75%). We expect to see the usual rush of buyers who are locked in at the old interest rates, looking to purchase and close in 2022.
We anticipate one more interest rate hike this year, so if you’re even remotely thinking of buying, get pre-approved and locked in before rates increase again.