Yes. I said it. The February Toronto Market Stats are filled with plenty of hype – particularly about the detached homes market. They are misleading and tell a story that is completely inaccurate about the average detached home in the Toronto market.
Are the numbers statistically correct? Yes. Numbers don’t lie. But how you look at them and interpret what they mean tells another story.
Here’s what I mean.
February 2022 Toronto Real Estate Numbers: Detached Homes
When I saw the year-over-year stats for February, I did what every other person did – I took a second look and said that can’t be right. A 29.53% increase in the average home price. How is that even possible? Was that an error? No. But what was behind this? It had to be something.
So, I took a deep dive into the numbers and here’s what I found. In February, there were 244 transactions in the Detached Homes category. But how many were considered trades in the “luxury market”? Anything above $4,000,000. Here’s what I found:
- 1 transaction over $20,000,000
- 2 transactions between $8,000,000 – $9,000,000
- 3 transactions between $7,000,000 – $8,000,000
- 8 transactions between $6,000,000 – $7,000,000
- 10 transactions between $5,000,000 – $6,000,000
- 13 transactions between $4,000,000 – $5,000,000
When I removed these transactions from the 244 total trading detached homes in February 2022, we have an average price of $2,338,522.00. Not $2,924,234.
I took this a step further and wanted to compare apples to apples. I did the exact analysis for February 2021, removing the $4,000,000+ sales, and here’s what I found:
The average price of a detached home outside of the luxury market was $2,051,423. Not $2,257,526.
When we look at year-over-year numbers, excluding the luxury market, we are seeing an increase of 14%, not 29.53%.
What does this mean? At the end of the day, the detached market is on fire as it has been consistently for many, many months. The numbers are fuelled by the luxury market, but the “average” detached home in Toronto is still increasing at a strong pace.
The lack of inventory isn’t helping and those buyers looking to buy before selling are in a vicious circle that contributes to the lack of inventory – can’t buy so they can’t list. We don’t blame them – it’s a tough market out there right now.
If you’re looking to buy a detached home, don’t be scared off by the numbers. Do a deep dive into the actual neighbourhood numbers you’re looking at to get a realistic picture of what’s happening and how that’s going to impact your offer strategy. If you’ve been following me you know that numbers are kinda my thing, so reach out any time and I’d be happy to chat with you about what this means.
February 2022 Toronto Market Stats: Semi & Row Homes
I realize I say this month after month but in real estate, I love consistency. And this segment of the market is incredibly consistent.
In February we saw the year-over-year increase sit at 11.29%. Healthy, stable, and manageable for buyers and sellers. The hot condo market is a big contributor to the stabilization of the semi/row market – the more sales in the condo segment lead to some of those sellers moving into this segment.
The big standout numbers here are the number of listings coming onto the market. January saw only 179 and February increased to 314.
Another key stat to look at is the number of properties sold. In January, only 111 transactions took place while in February 209 transactions were completed. This massive jump took place while the average number of days on the market plummeted from 18 in January to 9 in February.
If you’re looking to purchase a semi or row home, you may want to wait it out another month to see if the inventory keeps increasing – your pool of options may go up, but again, if you find something you love now, don’t hesitate to pull the trigger.
February 2022 Toronto Market Stats: Condos
This segment of the market is going to be an exciting one to watch. With the end of the pandemic in sight, the mass exodus out of the city that happened two years ago is going to reverse and we’re going to see many return to downtown living.
Offices will be returning to work and those that tell you that’s no longer a thing are sadly incorrect. Will office life look different? Yes, but there is one major reason those downtown buildings will be full once again. Real Estate. The long leases that corporations have in place aren’t going to be paid back by sitting empty. The return will be massive, and the city will be alive once again.
With the summer months ahead and a celebration of downtown living upon us once again, many will want to live among the excitement. We’re seeing it already with the number of transactions and the nice average price increase year-over-year and even month-over-month.
In February 2022, we saw a spike in new listings with 1640 in that month alone. There were 1126 suites traded, showing a nice month-over-month increase.
If you’re in the market for a condo, – buying, renting, or investing – act now. Don’t wait. It’s going to get competitive out there so now is a good time to be making moves.
So once again, the February Toronto Market Stats are really a cautionary warning to always look deeper into the headlines when the market stat numbers are reported. If something doesn’t look right, there’s likely a very valid reason.
~Romey Halabi
Founder & Lead Broker, Toronto Realty Boutique