There has never been a time in Canadian history when there has been a lower amount of homes available for sale than right now.
According to the latest data from the Canadian Real Estate Association, with only 2.0 months of inventory available on the market, Canada would entirely sell out of homes before March Break if no new units were listed. In Ontario, we’d be on track to completely sell out before Valentine’s day, in just 0.9 months.
For context, the national historical average for this metric sits comfortably around 5 months. When comparing year over year, by November 2020 the year-to-date average was 3.4 months of inventory, but in 2021 dropped to just 2.0.
The only four times in Canadian history where the total months of inventory dipped below 2, it has all happened in 2021. As of the date of publication, the December national numbers are still to come.
Fast-forward to today, the initial data for January is clear: ultra-low inventory wasn’t left behind in 2021. So far, sales volumes are down 30% year-over-year in the Toronto Region (comparing January 1-10), while buyers fight to get their hands on one of the few homes that are left on the market.
“We’re seeing extremely hot market conditions in the GTA right now – like more than 200 showings and 30 offers becoming the norm in many neighbourhoods. Just this week, I saw a property receive more than 100 offers in the Toronto Region, painting a stark picture between the red-hot demand and record-low supply we’re seeing in the market”CEO of Zoocasa, Lauren Haw.
Besides making for challenging conditions trying to gain a foothold in the market, there’s another story that’s emerging from this data: This might be the best time to list your home for sale in 2022.
Why What’s Causing Today’s Ultra-Low Inventory May Not Be Here to Stay
We called out in our 2022 Real Estate Market Predictions that we expect low inventory to continue to constrain the market into the new year – and that’s still true. There is a persistent, housing supply deficit in Canada that won’t disappear until new supply is added to the market.
According to a report from Scotiabank, in 2020 Canada had approximately 424 housing units per 1000 Canadians, whereas the average amongst other G7 countries is 471 housing units per 1000 residents. By their calculations, Canada would need another 1.8 million homes to catch up to the G7 average.
But layered on top of our persistent, systematic low-supply are new challenges brought forth by the Omicron variant.
“Put frankly, it’s hard to show your house when your kids are stuck at home. It’s adding an extra layer of complexity for would-be sellers. Not to mention, with the kids outside of school and many services still in lockdown, it’s feeling like an extended holiday period” explains Haw.
As of the end of December, The Toronto Real Estate Board reported less than one month of inventory on the market – but in hot areas, like Pickering, the ratio dipped as low as 0.3. In practical terms, this means there are fewer than two weeks of homes for sale in some of the most popular places for buyers.
As we saw just last summer when many potential buyers took a step back from the home search to enjoy life without lockdowns, this created opportunity for those who kept their homes on the market. Striking while your competition is distracted is a great strategy to win in the marketplace.
“In a few weeks’ time, when the kids go back to school, Omicron has passed its peak, and the lockdowns are over, I predict we’ll see a lot more inventory hit the market. Not to mention the inventory boost we historically see after March break. Sellers that can take advantage of this lull should – it might just be the best time to list in all of 2022.”
While Would-Be Sellers Are Preoccupied, Buyers Are Out in Full Force
Low supply is only one side of the coin as to why this might be the most opportunistic time to list your home in 2022 – we’re also predicting that these market conditions are creating the highest demand, and most intense pricing pressure, we’ll see in all of 2022.
“Last year, the spring market came early. By March, we’d already reached the peak of the market, when usually we’d anticipate seeing that in May” says Haw. “This spring’s buyers already know this, and they’re out shopping and putting in offers early. While I anticipate price growth to continue into 2022, the days of 30+ offers on offer night will not last forever.”
“The advice I’m giving to my team of agents, and the sellers that I’m working with is that if they want access to the highest price pressure that they’re going to have all year, the time is now.”CEO of Zoocasa, Lauren Haw
I Think I Want to Sell, Now What?
For potential sellers ready to act, the best first step is to talk to a listing agent to see what your home is worth.
Zoocasa has a team of more than 100 agents across Ontario who specialize in buying and selling real estate in your market – and we’d love to help you make your move. Click here to talk to one of our team members.