It's official: Not even a COVID pandemic has stopped the real estate market. Buyers everywhere, (not only in the city of Toronto), are going to have to spend more than ever because the average sale price for a home is already about $980,000.
TRREB (the Toronto Regional Real Estate Board) reports that the average selling price for homes in the area will even exceed $1 million for the very first time. By the end of 2021, it will be at the $1,025,000 mark, a striking increase from the 2020 average sale price of $929,692.
Jason Mercer, TRREB’s Chief Market Analyst, said "We’ve reverted back to the scenario that really we’ve been talking about a lot over the past number of years, where the supply of listings coming onto the market is not keeping up with growth in transactions. Taking those demand factors into account, plus what we’re looking at for new listings, coming into the market, that spells continued tightness"
This all comes because an unparalleled number of buyers have purchased 52% more homes and pushed the sold prices up to nearly $1,000,000. Why are prices so high? It's because there's an extraordinarily low number of homes for sale, yet an unprecedented amount of buyers ready to purchase. Not enough inventory plus high demand equals many buyers trying to purchase the small quantity available. We're back into seeing so many properties sold with multiple offers.
We didn't have a 'spring market' in 2020, due to COVID, so everyone started buying in the fall and that pushed the prices up significantly. Then, we were told to 'stay home' during the holidays and even with Ontario's state of emergency since December 26th, real estate is 'an essential service'. Plus, interest rates are at an all time low and poised to stay there throughout 2021, making borrowing easier.
Since I'm always 'in the know' about properties that are quietly availabe, I'm helping my clients purchase homes that are listed 'exclusively' - that means they never even hit the MLS system. I hear about these homes in the morning and by night or the next morning, they can be gone. That's how fast and hot this market is. This isn't just in Toronto, it's everywhere as over 50,000 people have moved to other areas in Ontario in 2020: Oshawa, Whitby, Ajax, Hamilton, London and more.
January saw the sale of 6,928 homes, up from the 4,546 homes sold in the same month in 2020. The average sold prices increased by 15.5%, from the same time last year, and the new listings spiked 20% over January 2020 but, still, the huge number of buyers overshadowed what was (and is) available for sale.
"Homehunters in the region won’t find much reprieve as the year progresses", TRREB chief executive John DiMichele warned. “I’m not convinced, at all, that we’re going to have a blip no matter how cold it is. People just seem to be out there,” he said. “It’s going to be a steady climb.”
TRREB president Lisa Patel said very high sales will be fuelled by the rollout of COVID-19 vaccines, declining cases of the virus in hot spots and very low mortgage interest rates. “Once we shift out of this lockdown, those that are comfortable will have the opportunity to put their homes on the market,” she said, "and that might open up supply a bit more. While new condominium apartment listings could slow towards the second half of 2021, market conditions for freehold homes will be very tight, and sales will rise more quickly than listings."