The June numbers from the Greater Toronto Area have been released, showing that the red-hot conditions seen earlier in this spring have firmly tapered off, but are still heated compared to historical market conditions.
A total of 11,106 homes traded hands last month, according to the Toronto Regional Real Estate Board, down 7% from May, and 29% below March, the peak of this year’s spring market. This slight slowdown is still up 28% from June of last year, but has resulted in a small dip in prices. The average home in the GTA last month sold for $1,089,536, dropping 2% to under the $1.1 million mark seen in May.
Buyers Take Note, the Market is Moderating
With fewer sales in June than seen in previous months this spring, the GTA market is experiencing a slight moderation from the record-breaking results seen earlier in the year.
While the market is still firmly in seller’s market territory, with a sold to new listing ratio of 66.2% in June, homes are taking a little longer to sell and selling closer to their asking price when compared to the hottest parts of this year’s spring market. The average number of days a property sat on the market in June was 13, 3 days more than March’s low. In addition, the average home sold for 105% of its listing price, down from 107% recorded in March. Both of these signs point towards a more moderate buying experience.
According to TRREB President, Kevin Crigger, the board anticipates that this moderation is not here to stay. “We have seen market activity transition from a record pace to a robust pace over the last three months. While this could provide some relief for home buyers in the near term, a resumption of population growth based on immigration is only months away,” he explains.
For buyers who have been on the fence about purchasing in the record-breaking, frenzied spring market we saw this year, this slight slow down presents a great opportunity to capitalize on friendlier buying conditions.
“Currently, we are noticing a lot fewer bidding wars than we were earlier this year. A lot of buyers have put their search on hold until the fall to try and enjoy the summer since the lockdown has eased up. But, with many of these buyers waiting until the fall to purchase, we could see conditions this fall return to the hyper-competitive landscape we saw this spring, with rapid price increases and intense bidding wars,” explains Zoocasa Sales Representative, Anthony Tomasone.
“Savvy buyers will see this temporary slow down as an opportunity to get into the market while their competition is at the beach or a patio. If this is you, it’s worth contacting an agent that can help you take advantage of the market moderating before the other buyers return to the market.”
Even Fewer Homes on the Market Will Continue to Put Pressure on Prices
Lack of supply has been a contributor to the red-hot market we saw this spring, and June’s data shows this problem is continuing. Only 16,189 new units were listed in the GTA last month, which is down 13% from May. The total number of active listings was also down from last month, decreasing 8% to a total of 11,297. Both of these factors continue to keep competition strong for buyers, where choice and options on the market are limited.
TRREB reports that “in all major market segments, year-over-year growth in sales well outpaced growth in new listings over the same period, pointing to the continuation of tight market conditions characterized by competition between buyers and strong price growth.”
This means that even though market conditions are moderating from the peak seen in early spring, buyers will still experience the impacts of low inventory and won’t be seeing significant price decreases until supply or demand change dramatically.
The City of Toronto, Peel, and York Region saw a minor decline in prices last month – down 3%, 1%, and 4% respectively. Similar to trends seen throughout the spring market, the regions with the strongest price gains were farther from the city core. Halton, Durham, and Dufferin have all seen prices rise 2% from May, and in Simcoe prices are up 5%.
Historically, June was a Strong Month with a Seasonally-Expected Slow Down
Sales volume, although up 28% from this time last year, slowed 7% in June compared to more recent months. Although this makes June the slowest month in this year’s spring market, historically, the number of sales seen this month are high. With 11,106 sales happening last month it was the highest June on record since 2016.
This tells us that although the market has slowed, the meaning of this is relative to the record-breaking, red-hot pace we saw throughout the spring of 2021. Compared to the rest of the GTA’s history, it was still a busy month in real estate.
Seeing lower sales volumes and a small decrease in pricing in June compared to May is seasonally expected in the usual spring market, since in normal years, May is typically the busiest month. Although in earlier days of the pandemic, the shock of this global event caused the usual seasonal markets to take place at different times than we’re used to seeing, June’s slow down could be a signal that we’re returning to more predictable real estate seasons.