Though the final data has not been released yet, based on the last several months of activity it’s obvious that 2021 will go down as the best year ever recorded by the Toronto Real Estate Board.
With 9,017 sales reported, November 2021 became not only the most active November in the history of TREB, but also set a record for the highest average price with $1,163,323, up 21.7% over November 2020.
There have already been several predictions publicized for the year ahead. So rather than throwing my hat into the mix, what I can assure you is that no one REALLY knows! Who would have guessed a year ago that prices would rise 22%? What is clear is that market conditions will likely not soften. Demand is at an all time high, caused by the transfer of wealth, immigration, low unemployment, an increase in wages, and likely continued low interest rates. Adding fuel to the fire, is the limited supply of available real estate attributed to government red tape delaying building permits and the government’s freezing of developable land.
The supply and demand issues referenced above, are illustrated in a statistic that is seldom talked about by realtors and the media, but I believe to be the best indicator of market conditions. That is the MONTHS OF INVENTORY. The Months of Inventory is the number of months it would take for all the homes currently on the market to sell, if no new listings come to the market (which of course would never happen). Four to six months is indicative of a balanced market. While over six months is a buyer’s market and under four months is a seller’s market. The months of inventory for the entire market in November was less than one month! Four times the amount of homes for sale needs to come to the market before prices level out. Homes sell faster and for more money when buyer’s have less choice. What I will predict is that during the holiday season through to the middle of February the months of inventory will go even lower and will put extreme pressure on prices to the seller’s advantage. There could be a fly in the soup though if Trudeau announces an ugly spring budget which has been threatened to attack the principal residence tax exemption. Keep in mind, this market is fluid and it’s never a great idea to try to time the market, but if you are buying and selling around the same time it’s all relative.
So if you would like to take advantage of this time, discuss the market ahead, or would simply like some advice, please don’t hesitate to contact me. I’m never too busy to talk about real estate.
I would like to take this time to thank our clients and the community for making our team the #1 in the city again! It's an honour serving Central Toronto and the GTA.
Wishing you a safe and happy holidays and all the best in 2022!
Barry
