The January 2024 Toronto real estate market stats are in! Usually each month I break down segment-by-segment what’s happening in the market and provide insights to my clients about what to do within these segments if you’re buying or selling.
But this month is a little different because I want to start with some major advice for buyers and sellers who are or are about to be in the market very soon.
January 2024 Market Stats: The Overall Market
I usually talk about how misleading the headlines in the news are about real estate in the city, and the past few weeks have been no different. The amount of misleading news out there is unreal – let’s look at a few of them.
Bidding wars are making a comeback as homebuyers try to beat interest rate cuts
People formed a huge line to bid on this Mississauga home with a whopping 85 offers
Greater Toronto housing market tightens as home sales surge 37% in January
Talk about confusing. No wonder so many of my clients have been calling me to discuss the market and what’s happening despite the headlines being all over the place.
So, let’s start with January. From a personal business perspective, it’s been BUSY. I can honestly say it’s been the busiest January I’ve had in several years.
Buyers are the ones taking the lead, both in pre-construction and in the resale market. Right from the first week of January, I had many buyers picking up pre-construction condos at Q Tower and Bellwoods House. Listings were also getting offers and closings were happening.
We had the very first interest rate announcement of 2024 and as widely expected, it was a hold. There was also a very noticeable change in the Bank of Canada’s language, now referencing rate cuts rather than rate hikes. This gave some confidence to the market, and I think this is why buyers were acting.
There is a lot of pent-up demand out there – even more so than during the pandemic. So many buyers have been holding off on making offers, and an incredible number of sellers have been holding off on listing as they’re waiting for that elusive first rate cut that we should see in Q2 of this year.
Behind the Misleading Headlines
The first thing I want to do is to take a moment for my favourite headline of the week. Let’s dive into
“People formed a huge line to bid on this Mississauga home with a whopping 85 offers”.
Let’s look at the facts:
Address: 3479 Longleaf Court
Neighbourhood: Mississauga’s Erin Mills neighbourhood
Bedrooms: 3
Bathrooms: 3
Style: Semi-Detached
Listing Price: $749,900.00
Number of Offers: 85
Sold: $999,900.00 – $250,000 over asking price
That “SOLD FOR $250K OVER ASKING” is a clickbait-worthy headline, as anyone interested in real estate would likely want to know what’s behind this. It gives the impression that the market is booming, bidding wars are back, and buyers are salivating for homes and ready to overpay
WRONG. Nothing could be further from the truth. This is the perfect example of a bad listing strategy that gives a false narrative around what is really happening in the market.
Here’s the real deal. The home was listed at $749,900.00, which coincidentally, is the same listing price that it was up for in 2017.
In actuality, the true market value of the home, based on an analysis of comparables, competition and neighbourhood reports was truly around $990,000.00 to $1,050,000.00.
So, in the end, this home sold actually sold for its approximate market value.
That’s a pretty boring headline, isn’t it?
Now, does this mean that the market isn’t in the process of returning with a bang? No. It is just not happening at the overnight pace some would like you to believe.
With all of this hype, many sellers believe they’re going to be getting hundreds of thousands of dollars more than what their home is actually worth.
Just last week I submitted two offers on behalf of a client looking for a new home. We analyzed what they were worth, and since both were holding back offers to an offer date, we had a strategy in place based on market value and a ceiling they were comfortable with.
We lost out on both homes, but the interesting part is that NEITHER seller took any of the offers, and both relisted their homes the next day at prices WAY above what the market value currently is – over $200,000.00 more than what they’re actually worth.
My Advice for Buyers
I still stand by the fact that now is an incredible time to buy. There is so much pent-up demand out there, and it’s best to get ahead of all of those people who are waiting. I’m telling you, once that first interest rate cut hits, things are going to change quickly.
But with that said, there is nothing more important than knowing your numbers and having a strategy in place before making an offer.
You need to have your finances in order, know what you can afford monthly, and what the top of your budget is. What is your walk-away number? The number that even if it’s a dollar more, you’re ok walking away. Take the emotion out of it as best you can.
Partner with an agent who can represent you best and knows the numbers inside and out. There is no other way to approach the market right now because many sellers believe their home is worth a lot more than it actually is. Don’t let the headlines dictate how you act in the Toronto real estate market.
My Advice for Sellers
My biggest piece of advice is to work with an agent who’s going to give you the actual real picture of your home’s value, versus the “sky’s the limit!” line may hear. It’s not the truth and unfortunately, many agents will tell you exactly what you want to hear to land a listing. I’m sorry to say, but it’s the honest truth.
If you want to sell your home and get the most money possible for it, you need to have the facts, and numbers don’t lie.
Buyers are still out there looking for a major deal. I’m willing to bet that of those 85 offers on that Mississauga home, at least 80% of them were below $900,000. If not more. Many buyers probably thought they’d toss in an offer just to see what happens. It’s a bad strategy as a seller because you really only get one chance to make a first impression.
There is nothing wrong with holding back offers to an offer date. I do it often with a lot of success. I strongly believe if that home in Mississauga was listed for $899,900.00 with an offer date, they would have easily gotten over $1 Million for it, and likely above market value.
As a seller, you need to ensure you’re working with an agent who is more interested in putting money in your pocket over creating headlines in the news.
Let’s take a quick look at the January 2024 Toronto Market Stats.
January 2024 Toronto Market Stats: Detached Homes
That increase of 16% in the year-over-year prices in the detached home segment probably made quite a few people wonder what the hell was happening in January to cause such a jump. But like I always say, let’s look at the impact of the luxury homes market – something’s got to be up here.
And taking the luxury market into account, you’ll be surprised by the impact. See below:
2023 January Detached Average Price Excluding Luxury Homes ($4 Million+) = $1,756,971.00
2024 January Detached Average Price Excluding Luxury Homes ($4 Million+) = $1,728,192.00
So, the average price year over year, of a detached home is actually DOWN in 2024 by 1.6%.
How is this not reported widely??? It blows my mind – prices are NOT up 16% – they’re actually down 1.6%, which to be honest, is a pretty great stat considering where we are in the market. January numbers, interest rates, buyers and sellers holding off on making moves – this is a good news story but again, it’s not the “Up 16%” headline that the news will have you believing.
The majority of detached homebuyers in Toronto are not in the luxury – $4 Million + group, so it’s best to look at this from a realistic lens versus an inflated one.
Semi-Detached & Row Homes
This segment of the market is behaving in a very typical and predictable way, as it usually does. Listings are down – mostly due to the seasonality of the market, but many buyers are also waiting for the interest rate drop we’ll see in Q2 to actually get into the market.
My one item to note is for buyers – some sellers are jumping the gun with their inflated prices, so make sure you know your numbers and you know market values. A deep dive before making an offer is an absolute must to ensure that you’re not overpaying.
Sellers, be smart and price well. You’ll have a quick sale with respectable offers, and you’ll benefit on the buy when you make your next move. Smart strategies will win big time here.
January 2024 Toronto Market Stats: Condos
The condo market is a very interesting story this month. The quantity sold being up 52.2% and new listings up 19.9%, shows that activity within this segment is back.
The other numbers prove to be almost like an algebra problem to solve.
Quantity Sold is up
New Listings are up
Days on the market are way up
Pricing is flat
So how does this make sense? From what I’ve seen in dealing in the condo market over the past few weeks, is that condos are being listed way over market value, and they’re sitting. Sitting for days and days with little to no action.
That causes the seller to have to implement a price drop, likely to market value, which is flat to last year, and boom, they sell. If the proper strategy would be in place sooner, I’d be willing to be the average days on the market would be plummeting. Buyers are ready, but they’re smart.
Sellers – again, list with the right pricing strategy and you’ll be very happy you did. Know those numbers once again, and you’ll be in that sweet spot of the market that all sellers crave.
OK, that was a lot of info to take in about the January 2024 Toronto Market Statsbut I hope you’ve found it helpful. Now besides crunching all of these numbers for my clients – you may or may not know (but hopefully you do) that I help many clients buy and sell real estate daily. 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 who 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.
~Romey Halabi
Founder & Lead Broker, Toronto Realty Boutique
416-999-1240