The January 2022 Toronto real estate numbers are in – it’s time to take a dive into them and examine what they really mean.
When the monthly numbers are reported, we don’t just post them without context – our process is much more involved than that. It would be easy to just toss them out there but how is that actually going to help?!
We look at the current state of the numbers, how they compare year over year, how they compare month-to-month, and also, how they look over the last three months. That last part is so important when looking at trends in the market and predicting where things are headed in the short term.
Why is this so important? Many buyers and sellers make moves within three months. Thinking about selling? You’re going to start preparing and building your listing strategy with your broker within this timeframe.
If you’re going to start looking for a new home, it’s going to take you a bit of time to determine the key factors that are non-negotiables in your search, and ultimately find the right home.
That’s why we take time to look at what all of this means for my clients who are in the detached homes, semi/row home,s and condo markets. Let’s take a look at January.
January 2022 Toronto Real Estate Numbers: Detached Homes
When looking at the detached homes market, it’s incredibly important to look at the trending past three months. Year-over-year will certainly give the “WOW” numbers and create crazy headlines, but you’re not really going to see any concrete evidence on anything except Holy Sh*t the numbers are skyrocketing.
Let’s quickly look at where January ended, just so you can see it, and we can use them for reference. The average price has jumped a whopping 17.67% from January 2021. That’s a huge number.
But let’s stop here for a minute and look at that important three-month trend. Let’s note the average price of a detached home in:
October: $2,385,335
November: $2,455,836
December: $2,178,132
And let’s discount December as most buyers and sellers pulled out of the market due to the holidays. Now you’ll see that prices are still up, but at a much more reasonable pace.
One of the key indicators that we look at when it comes to market trends is the number of new listings per month. If supply keeps getting lower and lower, the simple economics of supply & demand will continue to play out, and prices will go up faster and faster, with more bidding wars occurring.
Over the past three months, we have seen a downward trend in new listings. The reasoning behind this could be because sellers are simply waiting for the spring market to list, but this also means they are waiting for that spring market to buy.
So, the detached homes market finds itself in a bit of a never-ending cycle – waiting to sell, waiting to buy, not enough listings, too many buyers. This constant cycle leads to crazy price increases and bidding wars because everyone is essentially on the same timeline.
Our advice – if you’re thinking of selling your home and buying a new one, you need to buy first, but with a long close. This will allow you to take advantage of getting into the market now, and then benefiting from the hot selling season when you list your house.
January 2022 Toronto Real Estate Numbers: Semi & Row Homes
The semi-detached and row home market is one of the most stable segments of the three key ones we look at. It can be trusted for both stability and growth, and these are the reasons many start in a condo, move up to this segment and remain there for a long time.
With the January numbers, we can see again a major increase in the year-over-year average price which is at 14.29%.
But let’s once again, examine the three month trend of average prices:
October: $1,514,416
November: $1,614,306
December: $1,527,533
We again see the trend of a drop in December due to it being a slower month for trading, and a much more stable growth pattern. This should give plenty of comfort to those condo buyers looking to purchase a semi-detached home, and semi-owners who are looking to purchase perhaps a bigger home or in a different neighbourhood.
We’ll keep our eye on this market segment as the spring selling season creeps up. It will be interesting to see how much growth is realized – I think there is big potential for this to pop, so buyers will want to be aware of what’s happening.
If you’re currently in a condo and thinking about moving into a home, our advice is to think quickly. It only takes a week or two for a frenzy to start so you’ll want to be aware. As of right now, it’s a nice time to get out there are start looking. Remember, a stable secure market is the best kind of market to be buying and selling in.
January 2022 Toronto Condo Market
The Toronto condo market is always interesting to look at, and one of the main reasons is because the data, and the trading don’t really see any seasonality. Holidays, sprucing up your yard and curb appeal don’t really come into play with this segment. Trading is always happening, and traditionally at a pretty stable pace.
When we look at the January numbers, there are two major things to note. First, we have another whopping year-over-year percentage increase, sitting at 21.81%. Another item to note is the sheer number of transactions each month, which in the condo segment is pretty steady – in January alone there were 859 transactions in the downtown district. It’s not a one-off either – in December that number was 831.
When we take a look at the important 3-month trend, we’re going to see that the average selling price is pretty flat:
October: $848,476
November: $852,789
December: $833,308
With that said, when we look at the number of new listings hitting the market, I’m currently seeing a downward trend, which indicates the market is poised to pop in the coming months.
Condo prices are going to soar due to the lack of inventory. Many condo sellers are using the strategy of buy-first, sell later, which leads to a lack of inventory and many more buyers. Bidding wars will return, and big month-over-month numbers will be the driving force once again in the condo market.
Our advice – if you’re looking to buy in the condo market for the first time, get in now before this fire starts. If you’re looking to sell, you can use the strategy of buy now with a long close, so you can potentially get a bit more for your condo.
But remember, waiting to sell to get a bigger number and buying then just means you’ll be paying more for your new condo. It’s worth it to enter the market with ease now.
If you need to wait and suddenly notice prices soaring and bidding wars starting up again, don’t fret. There are still some buying strategies that work, such as developer inventory and assignment sales – these aren’t on MLS so there is much less competition than the traditional market.
Bonus: Toronto Pre-Construction Market
If there was any hesitation about the pre-construction market, those were all silenced with the launch of XO2 Condos, coming to the corner of King Street West and Dufferin.
This project launched on January 7th and we’re proud to have represented 13 buyers. This was the first release and the project was so well-received that they’ve decided to release some of their terrace suites to a select number of brokers.
We have access to these so if you are interested, simply register with us so we can send you all of the details.
If you have questions, don’t hesitate to contact TRB anytime – we’re happy to walk you through exactly what info you’re looking for – even if it’s simply a snapshot of what’s happening in your neighbourhood. Simply complete our form and we’ll be in touch right away.