“May” We Take A Closer Look At Those Numbers?

TREB released the sales data on Monday for the month of May, and by the time the evening news rolled around, you would have sworn the apocalypse had begun.

The numbers confirm what I, and what many of you, already knew: listings are up, sales are down, and prices have cooled since the insane February/March market.

But having watched the news reports, and read the newspaper articles, I feel as though the media is reporting half the story.

Let’s look at the May numbers in more detail, and delve deeper than just price, shall we?



The TREB numbers were released on Monday morning.

And by Monday afternoon, I had already received three emails and phone calls from media outlets.

The first was a request for a buyer/seller “who had purchased in the spring, and was now having trouble selling his or her home.”

The second was a request for a buyer “who has decided to put his or her search on hold.”

The last was for a buyer “whose appraisal for the property they bought, came in below what they paid.”

Whoever said that the media decide what they want to report, before they start reporting it…

I’m not naive; I get it.  Negativity sells.

If it bleeds, it leads.

Nothing has changed since I started in this business in 2004, and even though the market has been strong every year, and every month, since then, there have been far more stories about the bubble, the peak, the collapse, et al, then there has been about John & Jane buyer purchasing a property and living happily ever after.

The saying, “You can make numbers say anything you want” applies to all of us, not just the media.  But I’ve long-maintained that the media, if they want to tell a particular tale, will choose one of either: a) sales, b) prices, to prove their point.

Let’s say that prices are up 15%, but sales are down 2%.  That’s when we get the headline: “Toronto Market Down In August.”

Is the market down?

Prices are up, right?  Sales are down, but who cares about sales?

Well, if you’re trying to prove a point, and you’ve decided what you want to say in advance, then you simply find a number to back up your sentiments.

So today, let’s look at everything to do with the market, and not just ONE number that can prove a certain point.

I want to look at:

Average Price
New Listings
Active Listings


1) Average Price Was Up 14.9%, Year-Over-Year

Sounds great, right?

Yes, and no.

Most people who are in the know with the market will say, “Average price is only up 14.9%?”

That’s because the first four months of the year, showed us the following year-over-year percentage increases:

January: +22.3%
February: +27.7%
March: +33.2%
April: +24.5%

So to see the average home price “only” up 14.9% in May, is somewhat disappointing.

In fact, the average home price is actually down 6.6% from April to May.

The average home price in April was $920,791.

The average home price in May was $863,910.

So you could argue that “the market has cooled” and you would not be incorrect.

But it should also be noted that the average home price coming into the year was $730,472.

So despite the average home price dropping 6.6% from April to May, it’s still up 18.3% since the end of 2016.

And while I don’t want to seem like a real estate cheerleader, and I certainly don’t want to sound biased, I do want to point out that while the media is reporting that the sky is falling, the average price in Toronto is still up 18.3% goddam percent in five months…

I think I speak for most market participants when I say, “This is a good thing.”

It’s good for everybody but sellers with “FOR SALE” signs on their lawns right now.

And I say this while I have three active listings, and four more coming out this month.

But I’m being honest with my sellers.  I’m telling them, “The market is down since April, but you’re still up significantly since January 1st.”

And one of my sellers, who has owned his property since 1987, told me, “You can’t predict the market year-to-year, so what makes you think you can do it month-to-month?”

Very true.

But somebody who paid $128,000 for their house, which is now going to sell for $1,050,000, rather than the $1,100,000 it might have sold for in February, isn’t as price sensitive.

But back to my point that, this is a good thing.

A balanced market is a good thing for all involved, short-term, medium-term, and long-term.

With listings down 50% at the start of 2017, the market was chaotic.  Not just in terms of the price gains, but the way business was being conducted.

Now about those listings…

2) New Listings Are Up 48.9%

This number is staggering.

For your reference, new listings in the first four months:

January: -17.6%
February: -12.5%
March: +15.2%
April: +33.6%

“New listings” are different from active listings, keep in mind.

TREB defines new listings as: “listings entered into the TREB MLS system between the first and last day of the month/period being reported.”

So if a property is listed for sale on May 9th, at $699,900, with offers being reviewed on May 16th, and after not receiving the price they want, the sellers terminate that listing and re-list at $879,900 on May 17th, then that counts as TWO listings.

And herein lies the problem with the “New Listings” statistic.

TREB does not track double-listings or re-lists.  Perhaps they should.  God knows we pay them enough in yearly dues…

So when you see that new listings are up 48.9% in May, you have to take this with a grain of salt.

You might suggest that “double-listings and re-lists have always existed,” and you wouldn’t be wrong.  But in April & May of 2017, as I have noted in previous blogs, the market changed.  The process of how we buy and sell real estate in Toronto changed dramatically.

No longer were there 10-12 bidders for every home up for sale.  And as most sellers and listing agents were either late to recognize this, or simply refused to, they were forced to re-list their properties after the under-listing and “holding back offers” strategy failed.

The end result was a massively inflated number of “new listings” in April & May.

A truer measure of listing activity is “active listings.”

3) Active Listings Are Up 42.9%

This number is crazier than the last one.

And unlike the last one, there’s no disputing this number.

This number, in fact, is “the” number that people need be most concerned with.

For your reference, the first four months of 2017 showed the following year-over-year percentage changes in active listings, which is the number of listings available for sale on the last day of each month:

January: -49.5%
February: -50.5%
March: -35.2%
April: +3.0%
May: +42.9%

Unlike the “new listings” measure, there’s no disputing the accuracy of this data, and the interpretation.

Listings were down in the early months of 2017 by numbers that boggled the mind.

And that picked up on a trend from the fall of 2016, when active listings were down across the board:

December: -48.1%
November: -35.8%
October: -34.7%
September: -36.6%

So what’s the “reason” for the massive spike in active listings?

A real estate bear will suggest that somehow sellers are running for the exit, trying to get out while they still can.

Personally, I think that we just had one year when listings were down massively, and that was in 2016.

If you look at the “active listings” in May from the past five years, you see 2016 as an outlier:

2017: 18,477
2016: 12,931
2015: 18,585
2014: 20,679
2013: 22,677

Active listings are up in May of 2017 by 42.9% because they were so incredibly low, historically, in 2016.

In any event, we can dispute what a “normal” level of listings is.

Or we can simply conclude that no matter how you look at the inventory levels last month, there’s a lot more for sale than usual!

Forget about year-over-year.  Just consider how many active listings there were (and by that I mean how few), before last month:

January, 2017: 5,034:
February, 2017: 5,400
March, 2017: 7,865
April, 2017: 12,926
May, 2017: 18,477

There was 3 1/2 times as much on the market at the end of May, than compared to the end of January.

That is the biggest take-away from this month’s market watch.  Not price.  But inventory…

4) Sales

Sales were down 20.3% in May.  That’s a big number too.

The trend for sales follows the inverse of the trend for active listings:

January: +11.8%
February: +5.7%
March: +17.7%
April: -3.2%
May: -20.3%

Listings have increased.

Sales have decreased.

Is it any wonder we’re finding ourselves in a more balanced market?

As a result, is it any wonder why the average home price is down, month-over-month?

As I wrote on my blog in May, the month of April was an odd month.

With the Easter/Passover break, a lot of buyers weren’t active.  And while some commenters suggested that this is a misnomer, and that I was somehow mistaken, I would state unequivocally that buyers were not nearly as active during this time period.  I know from my own experience, and from that of my colleagues.

We had the Home Trust scandal, the Liberals’ announcing the Ontario Fair Housing Plan, and all-in-all, April was slow.

But who thought this would continue into May?  Raise your hand.-

So what’s the conclusion here, folks?

Where are we in this market right now, and where are we headed?

Because if you watch the news, as was the case on Monday night, it’s all doom-and-gloom.  They’re not reporting that prices are still up 18.3% this year, despite the 6.6% April-to-May drop.

Although with sales down 20%, they’re well within their right to suggest that there are some buyers “on the sidelines,” waiting to see how things shake out.

If Toronto is set to follow Vancouver’s lead, then perhaps we’ll see another few slow months before things pick back up again…


Post A Comment

Your email address will not be published. Required fields are marked *

  1. Ralph Cramdown says:

    What the Industry is Really Thinking

    Further to the recent escalator clause stinkbomb, OREA has written a public letter to RECO, saying these things are terrible, illegal, will corrupt the morals of our youth &c &c. Buried therein is an interesting paragraph:

    “Another concern for our members is that the preclusion of its usage seems to be confined to registrants under REBBA, 2002. In other words, buyers who are unrepresented, or buyers who are represented by solicitors would be free to use the clause. A clear disadvantage to buyers who are represented by a registrant.”

    So escalator clauses are awful, terrible things, but buyers who use them would be at an advantage over any buyers who can’t? I think we see the industry’s real concern here: Use of the thing would mean fewer ‘yahoos’ (who outbid the competition by $80-100k) in the wild. And that would be a terrible thing for sellers, who are the real parties that everyone in organized real estate actually works for.


  2. Terry B says:

    Its just a gully.

  3. Stuart says:

    As a former Realtor, I learned that while hard numbers certainly do tell a tale, we can not diminish the fact that the market demands confidence. Human emotions play a huge roll in where the market goes and if confidence is lost, emotion rules the day. I have seen deals go South over a simple $1500 refrigerator and now sellers are living in Feb/Mar/April price ranges and buyers are not. Right now I am hearing buyers think they can low ball and offer 90% of asking. It’s going to be months before this “lack of confidence” shakes out.

    1. Jack says:

      Very true. But what you call “low balling” would be simply an ask-bid spread in a normally functioning market. Since we are throwing around all kinds of numbers, does anybody know how many properties have sold for below the list price in May? In April? In March? That would be an interesting number.

  4. Condodweller says:

    This is a good analysis of the market. It will be interesting how it plays out the next few months.

    Two things: 1. People often misinterpret the effect of percentages. They don’t realize that if something goes down 50% it would have to go up 100% to get back to the same level. Using 2017 active listing numbers according to my quick calculation listings are still down 76.2% even after the 42.9% increase in May. I wasn’t going to calculate again using the numbers from September but it would be even more dramatic.

    2. The 3.5 time more active listings in May vs. January isn’t really all that surprising, is it? I mean isn’t the dead of winter usually slower than the popular hot spring market which would include May? To me, 3.5 times listings in May of January is business as usual.

    1. JCM says:

      Huh? Active listings are down 76.2% from when? 1992?

      Active listings are up 42.9% compared to May 2016.

      Looking at the TREB archive, there were 11,255 active listings in September 2016, compared with 18,477 in May 2017, meaning that active listings are up 64.2% since September 2016.

      1. JCM says:

        “People often misinterpret the effect of percentages”

        – The guy who added up a bunch of year-over-year percentages that were reported on a monthly basis

        1. Condodweller says:

          Right, I messed up the monthly numbers. The point I was trying to make though is that the listings being up 42.9% over last year as being reported by the media people tend to think wow, it’s up almost 50% whereas using David’s annual numbers for May active listings were down 30% 2015 to 2016 and the increase between 2016 and 2017 is up 42.9% even though the numbers in 2017 have not even surpassed 2016.

  5. Jennifer says:

    I’m curious, what does everyone have to say about this: https://www.thestar.com/business/real_estate/2017/06/06/as-torontos-housing-market-cools-montreal-posts-record-home-sales.html

    Everyone saying that a foreign buyers tax doesn’t affect the market as much as we think yet when a city enacts one, sales go down in that city and another major city’s sales take off. People saying that foreigners are not Canada, with a lot of cash buying relatively inexpensive houses compared to their home country, are not with reality.

    1. Jennifer says:

      meant foreign buyers affecting market

    2. Ralph Cramdown says:

      If you assume that a foreign buyer tax is politically popular (it was huge in BC, and it is unimaginable to think that the Ontario government didn’t poll on it before implementing)… and if you see that the local real estate organization spends bigly and concentrates lotsly on trying to stop these… (going against public opinion for no obvious gain???)

      If it was small, why would they care? These guys aren’t Amnesty International, they’re cash flow quarterly. Richard Silver, former TREB president, rebuilt his whole business to focus on foreign buyers. These are my observations, please form your own conclusions.

  6. JCM says:

    “You can’t predict the market year-to-year, so what makes you think you can do it month-to-month?”

    Actually, the sales-to-new listing ratio is a highly predictive leading indicator of the rate of annual price change 3 to 4 months in the future. That’s why TREB reports those two metrics on the same graph. It’s common sense — supply and demand right now affect prices in the future after the market has had a chance to adjust.

    It’s tough to predict where the market will be in a year, but based on the 0.39 sales-to-new listings ratio from May, we’re likely to revert to 2016 prices by September or so. Anyone who buys in June is probably leaving 15% on the table.

    1. Geoff says:

      So would March have predicted April numbers then?

      1. Geoff says:

        Sorry would January have predicted May numbers then?

        1. Mike says:

          No, because the market was affected by an outside source.

        2. JCM says:

          Maybe not January, but new listings were higher than the historical average in March. But, yes, there were also some external forces at work other than supply and demand.

          Actually, here’s an article with a similar thesis as mine: http://www.macleans.ca/economy/realestateeconomy/is-torontos-housing-market-decline-for-real/

          1. Geoff says:

            Well if Maclean’s says it…. 🙂 But fair point. On the other hand, hindsight is 20/20. My personal viewpoint – and I have no real skin in the game, I’m not moving – is that timing the market is incredibly hard for professionals, let alone amateurs regardless of the market. So we live within our means, tend to our portfolio, tend to our house, bbq in the backyard and drive our paid for new car. But I’m sure there are many who like to keep up with the joneses, but not everybody does either. There’s lots of people like me that I’ve met too.

  7. Real Estate Millennial says:

    These numbers are irrelevant most people have a long term horizon when purchasing real estate anyways does anyone think Toronto won’t be the epicenter of Canada or believe that it will stop growing and attracting people in 10 years? We talk about real estate like day traders, when most people don’t trade real estate like a day trader is my point. If you wan’t a real, real estate story how about the reform of the OMB cities are already flexing their muscles with developers and denying them higher densities. Agents/brokers are citing one value and we have planners saying no we’re not going to allow that density so appraisal values are coming in conservative. Given the first reading of the reform developers don’t have a leg to stand on as the OMB will no longer be overarching authoritarian . This will change supply but it will also change the value of redevelopment sites what happens to prices then?

    1. Geoff says:

      There’s a house that went on the market up the street from me, 91 roanoke road. $1.45M. It went on the market yesterday, so I’m just curious to see what happens with it. It’s kind of like my little canary in this May/June interesting time. It’s maybe not the nicest house but it’s decent – still a cool $1M over what I paid in 2007 for my detached.

    2. Ralph Cramdown says:

      The numbers might not be so relevant for the “we just bought our forever home to raise our children in” people. But they’re being watched very closely by:
      – We’re going to fix and flip, and our buyers will pay four land transfer taxes plus all our other costs and a healthy profit. Wait, what?
      – We’re selling soon and buying a place and a boat in Florida. Wait, what? We’re gonna get a smaller boat.
      – We love our cash flow negative rental, because its value is going up by $5,000 per month. Wait, what?
      – We’re going to increase our HELOC, to help our kids get into the market and pay off our credit cards. Wait, what?

      1. Joel says:

        And all of the people that bought multiple pre-builds who are worried they are nothing to be able to sell for more than they paid and will not have the income to close on them

        1. Condodweller says:

          All those people were speculators who should have been aware of the risks and be ok with it. If they weren’t, welcome to the school of hard knocks. They will probably not make the same mistake again, one would hope.

    3. natrx says:

      Alot of people have got stuck buying first at the top and literally a week later, trying to sell, having it fall out underneath them. Alot of people also have bought 2nd properties. Another big group have overpaid in March, and just now closing but possibly trying to find a way out as they see they paid more back then vs closing now.

      1. Geoff says:

        It’s curious to see that people think they’re so attuned to the universe that they know ‘the top’. If prices level out for 6 months and then go back up again, they’ll feel stupid.

        1. Ralph Cramdown says:

          I agree that it’s way too early to say that we’ve seen a long term top. But for move-up buyers who bought before they sold in the spring (hot market, correct strategy) and stretched to close to their limit based on an assumed sale price for their current abode, even a cooling of a few months could be nerve-wracking and expensive, or worse. Do you:
          – Sell your current place at today’s levels, and pay maybe 10% for a second mortgage on the new place?
          – Go to your parents with tail between legs and ask for a bailout?
          – Hold out and hope things turn around before your closing date?

          Remember that most Canadian of real estate proverbs: He who has one foot in each of two canoes sometimes ends up underwater.

          1. Geoff says:

            Fair enough. But that is the risk one takes. I remember in 2007 we sold our loft first, and then bought because I wasn’t comfortable with that risk back then. And we haven’t moved since then 😉

      2. Condodweller says:

        @natrx These are the only people who have a real concern but only if they had bought in the last year or so which is unlikely. Everyone else who bought more than a year ago are still covered on their original purchase price and have “lost out” on the recent run up by being whipsawed.

        If there was anybody who got in over their head last year and forced to sell should still be ok since they would not have bought another house first.

    4. Kyle says:

      Well said, @ Real Estate Millennial. For most buyers, the long term fundamentals of owning real estate in Toronto haven’t changed. What’s changed is that there is added uncertainty at the moment, for both buyers and sellers. IMO what we’re seeing will be very short lived, as it was in Vancouver. Once confidence returns, i think buyers will be looking back upon this as a small window of opportunity.

      Also agree that longer term things like the OMB’s new direction are going to play a much bigger part in where prices go.

    5. Mike says:


      You don’t think people in Montreal said that they were the epicenter of Canada in 1975 and why should it be any different 10-years from now? Montreal offers some incredible corporate tax rebates for business, particularly those in the financial and tech spaces. If they could get their government problems in check then there is a very real possibility they could make a come back. The reason they lost all of Canada’s head offices was because of issues with the provincial government. Currently Ontario has massive debt and high tax rates, it wouldn’t be hard for companies to load up the trucks and head back east along the 401.

      Then you have the last pull back where housing prices didn’t reach the levels seen in 1990 until 2001: eleven years. You’re right, you’re probably not buying real estate as a liquid investment but that family who paid $1.5mm for a semi off the Danforth may want to upgrade in the next 10-years. What was comfortable for three kids under 4 would be a nightmare with those same three kids aged 10 to 6. You’re going to want to at least get what you paid for your house when you go to upgrade.

      Then you have the whole financing thing. You bought your $1.5mm Riverdale semi using a 5-year fixed rate mortgage at historically low rates of 3%. You go to renew at the end of term and you still owe just over a million, rates though have gone up 2%, and your house however had declined in price by 20% it gets to be a bit of an issue.

      1. Ralph Cramdown says:

        You make a good point about change. Some years back, there was talk about Calgary becoming the new business nexus of Canada. All the head offices starting there and moving there, the whole “Alberta Advantage” thing. As someone working and living downtown Toronto in finance, it didn’t seem implausible to us at the time. It hasn’t happened so far, but if oil price zigs and zags had been a bit different from then forward, who knows?

        In the US, LA, NY, Chicago and SFO have taken turns being the leading lights of growth and teetering on bankruptcy. Anyone wanting to invest in an eternal city for real estate, I’d suggest Rome. It’ll at least be figuratively true, if not literally.

        1. Mike says:


          Ever been to Canmore? All Toronto refugees, mainly lawyers and investment bankers, people who can move easily.

          How much longer do you think it will take before CEO’s start to figure out living in another province will put more money in not only their pockets but their shareholders pockets?

          1. Ralph Cramdown says:

            I’ve never been to Canmore in person. But over a decade ago, my cousin sold her trailer and lot there for $250k. I was absolutely gobsmacked at the price, given you could buy a detached house for that in a less-than-top area of Toronto at the time. No idea what’s happened since.

            Your question also reminds me of Telus, who thought they did great hiring a Toronto based CEO who was going to move out west “later.” When that turned out to be “when hell freezes over” they fired him. But geez, what an expensive little interlude that was!

      2. Sevyn says:

        I couldn’t have said it better! Totally agree!!!

      3. Sevyn says:

        Agree 100000000%

  8. Jack says:

    How big would a price correction have to be to have any major negative consequences? In any other market, a 20% drop in prices would be pretty bad. In the Toronto r.e. market, 20% drop in prices would only take us back to the already overinflated prices 12-24 months ago, not a big deal in the grand scheme of things.

    1. Condodweller says:

      It’s not the magnitude but the direction that counts. If we continue to see lower prices and establish a declining trend it will cause potential buyers to hold off longer, thinking they will have a chance to buy cheaper in the future. If things level off and begin to increase again in the short term then potential buyers will think it’s a short term blip and will want to buy as soon as possible, potentially driving up prices and we would be right back where we started.

    2. Mike says:


      It’s not just the price drop (which is some cases has been as high as 50-70% though for only a short period) it’s the stagnation.

      A house that drops 10% is not a big deal long term, but if it takes 10-years to come back to it’s prior value where you begin to have an issue. If you buy a house at one price and then 15-years later you’re only 5% above that price, you’ve lost all that money you’ve paid away in interest, even at a low rate.

  9. Ralph Cramdown says:

    Bad news sells better? Generally, it’s true. But every Toronto media outlet knows that ANY real estate news gets the eyeballs. There was just as much coverage about crazy bidding wars, and mobbed sales centres and open houses. Give the media credit, because calculating that price decline between April and May required a calculator and two minutes of… investigative journalism. It was THE story for the month, every real estate addled body was talking about it, and it was NOWHERE to be found in TREB’s press release, which was spin city written by Three Card Larry and his sidekick, prestidigitator Jay. How worried were they? They got that press release out Sunday before the Star had put its front page to bed. That isn’t normal.