The March 2023 Toronto real estate numbers are in so that means it’s time to take a look at what they really mean, rather than reporting them without any context, as most do.
I’m sure you’re familiar with my monthly reports where I dig into what the numbers mean and what’s happening in the market. My background is based in numbers (I was the head of finance for a big Toronto ad agency prior to real estate), so my approach to the market is very numbers-focused.
What you may not know (but hopefully you do) is that I help many clients buy and sell real estate on a daily basis. I am the Founder and Lead Broker of Toronto Realty Boutique and I specialize in listing homes and condos, representing buyers of all budgets, and I also do a lot of work in the Toronto pre-construction market.
So, if you’re thinking about buying or selling and want a Broker that can not only represent you better than anyone else, but who can also sort through the numbers and help you make the best move, don’t hesitate to contact me anytime.
Now let’s get into the March numbers.
The Overall Market: March 2023
It should be no surprise to anyone to see that the year-over-year numbers in each segment are down. Why shouldn’t we be shocked? The first quarter of 2022 was the height of the market – we were seeing double-digit growth in nearly all segments – and that’s because many were rushing to the market to purchase with their ultra-low pre-approvals.
Let’s remember that last year at this time, we were into the very first (of many) rate hikes. Panic was starting to bubble, and the rush was real. The proof of that was in the 2022 numbers. So, where we are at today is a reflection of what’s to come in April as well, so don’t be surprised when those numbers come out next month either.
Some good news regarding rates is that we’re into the second rate hold of the year already. This is giving confidence back to the market and buyers and sellers are on the move. The next Bank of Canada meeting is on June 7th and it’s honestly hard to predict what will happen. If unemployment numbers stay as low as they are or drop even lower, the Bank of Canada may be forced to act.
March 2023 Toronto Real Estate: Detached Homes
First, we should continue to examine some of the numbers that aren’t usually reported widely.
The year-over-year quantity sold is down 41.6%
Year over year new listings are down 32.7%
The year-over-year days on the market are up from 17 days to 18 days
After looking at the Detached segment numbers, many are scratching their heads trying to sort out what’s really happening. I mean let’s be honest – those numbers are all looking pretty dreadful.
But the year-over-year numbers really do need an asterisk beside them because of what a wild time it was in the market. So, let’s take a look at what the month-over-month trends are showing.
Month over month lends itself to a more positive story and when we look at predicting what’s coming up, this is what we must examine.
So far this year, we’ve been seeing the month-over-month prices of detached homes increase each time the numbers are reported. But that’s come to a bit of a stall this month, showing prices have dropped 1.5% from February 2023.
When we look at the temperature of market activity, we are seeing a 20% increase in new listings and a 35% in quantity sold month over month, showing that things are indeed picking up. Considering the not-so-great numbers, we can still find some positive factors indicating the market is rebounding nicely.
My Advice for Sellers: by looking at the increase in the number of new listings coming on the market, things are starting to get busy. Now might be your best opportunity to list your home and stand out, before many others decide to do the same in the coming months.
Don’t be afraid to list your home and be on the market for two to three weeks! I can’t stress this enough. It’s not normal for multi-million dollar homes to sell in 7 days! Currently, the majority of detached homes in the market are selling for ask or just above ask – so pricing strategy is a huge play here.
Another interesting stat to share with sellers right now – over 50% of homes that sold in March, sold for over ask. And that’s with an average of 18 days on the market. Think about that – no offer night, no same-day bully offers – just a pricing strategy that works. Again, know your numbers and work with a broker that knows them inside and out too.
My Advice for Buyers: if you’re in the market for a detached home, don’t feel pressured. You have time. Don’t rush into something that you don’t love. If you have your eye on a particular neighbourhood, wait for it. If you want specifics but can’t find them right now, wait. The market is picking up and there are a whole lot of sellers waiting to list. You’ll find what you’re looking for – I guarantee it.
March 2023 Toronto Real Estate: Semi-Detached and Row Homes
Let’s take a look at some of the numbers that aren’t usually reported widely for this segment.
The year-over-year quantity sold is down 40.9%
Year over year new listings is down 41.1%
The year-over-year days on the market are up from 7 days to 15 days
What are the month-over-month numbers saying? Within the semi-detached and row home segment, the month-over-month prices are down 5%.
But some very interesting stats to note here – of the sold units in March, 64% sold over ask with an average of 7 days on the market.
I’m sure you’ve seen the headlines in the media saying “Bidding Wars are BACK” – but what’s driving this somewhat misleading information?
Once I dug deeper into what was happening here, I discovered that those homes were either relisted at a much lower price than their original list price or listed for the first time but with a lower-than-market-value pricing strategy.
They all sold for their approximate current market value, but we can see that the pricing strategy of below market value in hopes of getting more is back and is working to get sellers a quicker sale.
Again, it’s all about what’s driving those headlines and what the hidden meaning is within the numbers.
My Advice for Sellers: with quantity sold and new listing numbers within this segment sitting at a near balance, pricing strategy is more critical than ever. If you’re looking for a quick sale, you need to price aggressively to get the most eyes on your home. But, you need to be ok with leaving some money on the table to get that quick sale.
If you’re price sensitive, price at or near where you want to end and hold your ground. Buyers are active so you’ll need some patience here.
My Advice for Buyers: be aggressive with your search. Look at everything on the market that fits with what you want and make an offer. You never know what type of situation the seller is in, so why not throw your hat in the ring with an offer that works for you.
Starting again with some of the other critical market stats –
The year-over-year quantity sold is down 36.2%
Year over year new listings are down 25.4%
The year-over-year days on the market are up from 10 days to 19 days
This is yet another situation where we need to take into consideration the wild market that was just one year ago in March 2022. All of these numbers were up double-digits last year, so of course that’s not sustainable in the Toronto condo market and we’re seeing the effects of that here.
Within the condo segment, we’re seeing a very similar situation as in the semi-detached and row home segment. Sellers are either listing at far below market value to get a quick over-ask sale (38% of sales were like this in March), or they are testing pricing by listing and relisting at a lower price.
Not a very good strategy in the market we have today and likely speaks to an agent that isn’t sure what’s really happening.
Those that are pricing at market value and holding out for their price are winning here – they have a good strategy in place, they know their numbers and they’re getting their market value price without any of the games. Sure, it’s taking a bit longer to sell, but it’s worth it to wait as buyers are simply taking their time.
The condo segment is still the most stable of all segments. We have seen month-over-month pricing increases each month since January – going up each month in January, February, and March. All excellent signs for the upcoming months in Toronto condo real estate.
My Advice for Sellers: again, pricing strategy is key here. I wouldn’t be recommending below-market-value pricing to any of my clients right now. Price your condo at what it should be priced at and play the waiting game. Buyers are in no hurry to purchase so make your condo shine to stand above the rest. With the right marketing campaign and pricing strategy, your buyer will come – I promise.
My Advice for Buyers: ensure you’re working with an agent that is well-versed in market value so you can determine the seller’s pricing strategy. This will help you prepare an offer that reflects not only what you want to pay but is appealing to the seller. You need to be an educated buyer in this market as many sellers try various pricing strategies to get offers.
If you’re thinking about buying, selling, or investing and want to discuss strategies, pricing, timing, or anything else, simply complete my form on this page so I can get in touch right away. I’d be happy to answer any questions about the March 2023 Toronto real estate numbers you have or about the Toronto market in general.
Founder & Lead Broker, Toronto Realty Boutique