Quick Reactions to the February 2018 Stats
In this episode Andrew la Fleur shares his reactions and insights on the February 2018 market stats. Why do the headlines sound so bad? Is the condo market doing ok? Will anyone buy your detached house in York Region?
0:20 Announcing upcoming event.
3:35 Stats for February
4:11 It continues to be a tale of two markets where condo market continue to be strong.
5:00 What’s the sales to listings ratio this feb?
5:57 Multiple offers anywhere downtown.
6:42 What’s bringing the region down?
7:55 The condo market is continuing to show strength in many areas.
8:41 Jumping over to detached market.
10:40 Where’s the weak point in detached housing?
12:05 You can’t time the bottom of these markets, it’s impossible, don’t try
Andrew la Fleur: Hey, how’s it going, everyone? Andrew here, and before we jump in to today’s episode, I just wanted to let you know about an upcoming event that’s happening very soon. It’s happening on March 24th, 2018, so if you’re listening to this podcast when it is coming out, it’s coming you soon. If you’re listening to this in the future, well, you missed the event. For those of you who are listening to the podcast as it’s coming out, on March the 24th, 2018, we’re having a special and I’d love to see you there. Everyone is invited. It’s a free event. At this event, I’m going to be telling you all about the next condo project that I personally invested in. It’s the first one that I’m buying in 2018 and I want to let you know all about it. I want to let you know the reasons why I’m investing in this particular project.
For some, the project might actually surprise you which project that is, so I look forward to revealing all the information about that very soon, but I just want to let you know upfront, it’s on March 24th, so if you want to mark that on your calendar, it’s going to be a special event. You’ll want to be there. It’s going to be in Toronto. More details to follow, March 24th. If you want to RSVP, if you want to get more information about that event, you can go ahead and drop me an email.
We’re going to have a page set up where you can RSVP, but for now, if you want to get more Info or RSVP to the event, you can do so by sending me and email, email@example.com or you can call or text me, 416-371-2333 and we’ll make sure to reserve your spot. Seating is limited at this event. It’s not a huge venue that we got for this event, so definitely get your RSVP in right away if you’re interested in coming to this event to make sure you do have a spot. March 24th is the date once again, and look forward to seeing you there. I’ll leave it at that and we’ll jump back into the episode. Hey, everybody. On today’s episode, I just want to share with you some of my quick thoughts on the latest stats that are out for the month of February from TREB. Okay, stay tuned.
Voiceover: Welcome to the True Condos Podcast with Andrew la Fleur, the place to get the truth on the Toronto condo market and condo investing in Toronto.
Andrew la Fleur: Hey there and welcome back to the show. Thanks for listening. Once again, Andrew la Fleur here. If you want to reach me, get a hold of me, you can always do so, firstname.lastname@example.org. You can call me, 416-371-2333. If you enjoyed this podcast, if you’re getting value from it, I get so many messages every single week, if you could do one thing for me that I’d really appreciate is just go on iTunes and leave a review for the show. That would be much appreciated. Thank you so much for those of you who have left reviews lately. I do read them all and I do appreciate it. Thanks so much. It really helps get the word out about the show.
Now, as I said, it’s just a late night here in the office, burning the midnight oil, and I wanted to get this quick episode out to you. Hopefully, you had a chance to listen to my last episode on the show where I interviewed Jason Mercer, the director of market analysis for TREB where we talked for quite a while. We really went in-depth on the market and took a look at where things are at right now. He was a great guy to speak to. Definitely go back and listen to that episode if you haven’t already, but I just want to share with you some of my quick takes on the market and what’s happening.
First of all, as we look at the stats for February, again, this is in the context of what are the headlines saying, what’s the media saying. Well, everybody’s saying, basically, the sky is falling. All the headlines are saying sales are way down, prices are down, the theme is definitely down and that’s sort of what people might be talking about around the watercooler perhaps at your office or at home or wherever you might be talking about real estate with people. That’s sort of the sentiment that’s out there, but what’s actually happening in the market?
Well, again, the main thing is it continues to be a tale of two markets where the condo market continues to be very, very strong, and the low rise and especially detached housing market in the GTA continues to be much weaker. I wouldn’t characterize it as a weak or a down market. It’s not that bad overall. There are pockets that are not doing great that perhaps you could describe as sort of down markets or really struggling markets, but overall, the market is just okay, not too great, not too bad kind of a thing.
Let’s dive into the condo market here again. The number one stat that I always look at that I encourage everybody else to look at is what’s the sales to listing ratio, and that’s going to tell us the temperature of the market and the direction of the market. If we look at that, once again, the downtown condo market continues, which is the main chunk of the condo market overall. Downtown condos continues to just surprise everyone, shock everyone, break records, do things we never thought it would do, and it’s been doing this for a very long time now, well over a year. We’re sitting at 70%, 70% for sales to listing ratio, which is a very strong seller’s market. I would say anything above about 50% is definitely a seller’s market. 70%, historically speaking, if you go back over the last 10 years is something that would very rarely ever happen. It’s definitely a strong seller’s market.
Looking at what’s actually happening out there in the streets, so to speak, multiple offers everywhere downtown, many stories coming out every day pretty much of 10, 15, 20 offers coming in on decent downtown condos, price records being set all over the place, massive shortages of properties. Looking across the region, Central Toronto and Toronto itself, you’re in the 60 percentile, kind of 60s percent range. All of the Toronto Real Estate Board, the whole region, 59% so downtown outperforming the whole region.
What’s bringing the region down? Well, once again, it’s York region sitting at 35%. York region, north of the city, your Richmond Hill and Markham especially, those areas are struggling but it’s still 35%. 35% is not really a buyer’s market. Buyer’s market traditionally is when … I define it as when it’s below 25%. If you’re going below 25%, you’re in buyer’s market territory. Again, historically speaking, the downtown condo market, which has seen so much growth as you know over the last decade, if you’d go back over the last decade, it’s averaged around in the low 30s percent, so in the low 30s, we saw the growth, the continued and consistent growth in the downtown condo market over the last decade. Prices are continuing to grow. York region is sitting right there right now, so you can expect prices in York region to grow this year if you’re looking at the condo market. Not going to be as significant obviously. It’s downtown in the Central Toronto, but still going to grow.
Interesting, Peel. Peel region, Mississauga is very strong at 71% as well, so again, the condo market is continuing to show strength in many areas, not just the downtown, which is very interesting to see. Prices are going to continue to go up and go up very quickly. If you’re thinking about buying for yourself to move into this year into a condo especially downtown, well, first of all, I wish you good luck. It’s very challenging out there, but secondly, my advice to everybody is don’t wait. Get in sooner rather than later because if you wait, prices, you’re going to pay more next week, next month, next quarter than you will right now. Just look at the supply and demand.
Okay, jumping over to the detached market, looking at detached housing, again, condo market, 59% across the region for sales to listing. In the detached market on the other hand, it’s 28%, so obviously, much lower but again, still not at that below 25% mark, which would define a buyer’s market. Getting there, almost there, but still not there, so kind of a balanced market, on the low end of a balanced market. Looking at the city of Toronto itself, just Toronto, the 416, you’re looking at 36%. 36% is … I thought that number would actually be higher because again, many of the stories and things that we’re hearing about people on, actual stories off the ground about what’s happening in the city of Toronto is bidding wars like crazy.
I just heard another one yesterday. A house, I believe it was near Christie Pits, around Dupont there, north of Bloor, and I think the house was listed at something 1.8 million. Got tons of offers, sold for like 2.4 million. 2.4 million, so just way, way over like 35% or something over-asking, $600,000 over-asking for this house. Very surprising, but we’re hearing more and more stories like that. Again, if you’re in the core, if you’re in that Central Toronto, if you’re on the subway line, the same old story applies. It’s very tough out there. Maybe it’s slightly better than it was a year ago. Certainly, prices are a little bit better than they were last spring, but they’re not really changed much over the past few months. If anything, they’re definitely trending up.
Again, when you look at the where’s the weak point in the detached housing, it’s York, York region once again, and this is really the part that’s hurting the most of any sort of pocket. It’s low rise detached housing in York region. The sales to listing ratio there, 17%. 17%, so again, you’re well below that 25% threshold. You’re definitely in the strong buyer’s market in York region if you’re looking for a detached house.
Obviously, a lot of people will say, “Oh, that’s a terrible thing. We want to stay away from that.” What I see there actually is a tremendous opportunity. At some point in time, that market is going to bottom out. It’s probably going to be sooner rather than later. Things are going to start to pick up sometime in the next few months, I believe, in that marketplace. Prices have come down tremendously. Anecdotally speaking, you’re hearing stories of, he’s bought the house for so much 12 months ago in York region and now, today, it’s worth 25, 30% less, or the house next to him sold for 25, 30% less than what he paid for it a year ago, kind of thing. You’re hearing these sorts of stories coming out of the York region.
Again, I do see a tremendous opportunity there at some point in the next few months. Maybe it’s right now. You can’t time the bottom of these markets. It’s impossible. Don’t try, but just be aware of that. If you are an investor, if you’re certainly an end user looking to buy in that area, be cautious obviously but understand that this might be the best buying opportunity that you’re going to have any time, certainly that you’ve had any time in the last few years and perhaps any time in the next few years as well.
Many buyers are agnostic in terms of where they buy. They’re going to look across the GTA. They’re going to say, “Where’s the best opportunity, best bang for your buck?” A lot of them are going to look at York region. They’re going to start buying in York region this spring. Prices are going to rise. That sales to listing ratio is going to go up, and there’s going to be that acceleration in the market. Right now, it is a great time to buy. If you’re buying smart, if you’re buying the right property at the right price and you have obviously an expert agent who’s helping the process, there can be a great opportunity there in York region.
There you have it. That’s my quick take on the market and the stats for February there. Just want to bring that to you. Main message again, condo market, very strong, detached housing market doing okay. Strong in some pockets, weak in some pockets. Overall, doing okay, so we’ll be interested to see what continues to happen there with the market as we had into the traditional spring, which is April, May, June. Those are typically the busiest months of the year for resale sales. Okay, there you have it. Hope you enjoyed this episode. As always, if you want to get the show notes or listen to all the episodes, you can go to truecondos.com/podcast. Thank you for listening. Until next time, have a great week.
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