I assure you, I’m not trying to paint a rosy picture of the Toronto real estate market with today’s blog post.
In the never-ending war between the Capulets and the Montagues, the voices tend to get a lot louder when one is on their own turf. Case in point, we’re in a “down market,” which is down from a massive peak, but down nonetheless. Whether this is a bear market, a buyer’s market, a recession, or a period of continual decline in real estate prices, remains to be seen – and argued.
So when I post any data that might seem positive, optimistic, or present myself as anything less than the proud owner of a Hangman’s noose, the Capulets come out in full force, suggesting that bias or downright “Fake News” might be admidst.
When looking at the real estate market, or any market for that matter, one must always look at the big picture, and evaluate things on a relative basis. Case in point, if I told you that “my shares of XYX Corp. are down 10%,” would that be a good thing, or a bad thing?
If the shares are down 10%, but the index for that particular sector is down 25%, then this stock is outperforming. The same is true of the inverse, ie. this is a bank stock that’s down 10%, but every other bank stock is down 2%.
If your shares are down 10%, but that’s after you saw them increase in value by 140% over the previous 18 months, then this is still a good thing, right?
Again, the same is true of the inverse.
If somebody’s house value is up 15%, year-over-year, but the value is still down 50% from when they bought it ten years ago, then can they argue it was a good investment?
All this preamble is to say that market indicators in Toronto are trending upwards, and while they are still down massively since the days pre-COVID, I’m merely trying to explain what’s happening in the market today.
Many people read this blog to know what’s happening on a daily basis, behind the scenes, in the trenches, or according to whatever metaphor you prefer. There are sellers sitting on the sidelines, waiting to list. There are buyers who want to know when they should expect inventory, and more to the point, when they should expect other buyers to become active again, thereby increasing competition.
So today, I’ll answer those questions by looking at some data provided to us by our friends at BrokerBay.
BrokerBay has essentially replaced front-desk software like Quick Office, Lone Wolf, et al, and I don’t think I’m out of line when I say most reputable brokerages have now made the switch. Not all, but most. And I do believe that eventually, this will become the standard. As it stands right now, BrokerBay has about a 50% market share, so these numbers are obviously not complete, but they’re more than just a random sample. I would take these numbers as wholly indicative of the market.
Since BrokerBay is front-desk software, it means they track showings as well as offer registrations, which means they can provide data that no other company can. There are other websites out there giving us sales and listings data, but BrokerBay has cornered the market here.
So first, let’s look at showings.
Showings are important because they demonstrate buyer activity as well as buyer confidence during a pandemic.
The following graph provides data going back ninety days:
In case it’s not obvious, Sunday always represents the low-point in showings, hence the major dips every seven days.
As you can see, buyer activity was steadily rising through February, with weekly peaks of 8,000 showings, followed by 10,000 showings, a slight dip down to just over 9,000 the following week, and then eventually it peaked at almost 12,000.
Then along came the “stay at home order,” and showings plummeted.
However, and not to put a ribbon on this, but rather to demonstrate a trend, we can clearly see that showings are, in fact, increasing. Week-over-week since the end of March, we’re seeing a gradual increase.
Does this mean we’re heading back to a red-hot bull-market? No, but this leads me to believe, as I wrote in last Friday’s blog, that April did represent a “bottom” of sorts.
There isn’t a direct correlation between showings and price, so I’m not saying that the “bottom’ for showings automatically means that we’ve reached the low-point with respect to the average Toronto home price. But as per my blog on Friday, I do believe that will ultimately prove to be the case.
Zooming in on the above graphic and looking at showings in the last 30 days, we get a better sense of the trend:
Again, consider that these “valleys” are simply Sundays.
If you want to look at the peaks as the indicator of each week, then we’re seeing showings more than doubling in the past two weeks. But we’ll come back to the week-over-week numbers in a moment.
I’m more interested at this point in month-over-month, as I think it eliminates some volatility, and represents a better indicator of a trend.
Let’s look at last week, May 4th to May 10th, up against the week one month prior, which was April 6th to April 12th:
Take Monday, just as an example. We’re looking at just over 1,000 showings compared to just under 3,000 showings. We’re up about 3x, month-over-month.
That week from April 6th to April 12th saw a gradual decline throughout the week, which isn’t typical. But either way, say the “peak” on Thursday, April 9th of just over 1,500 showings is still almost two-thirds less than the peak of 4,500 showings on Thursday, May 7th.
Cumulatively, the showings are up 149%, according to BrokerBay.
Offer registrations are also up by 158% since the same time period in the month of April, as are listings and sales per the graphic below:
Now, if we want to look at the time period of May 6th to May 12th and simply compare week-over-week, we see the same trend.
Aside from Mother’s Day, last Sunday, showings are up substantially every single day, compared to the week of April 27th to May 3rd:
Again, looking at Monday as an example, we’re going from around 2,100 showings to 2,900 inside of a single week.
Had it not been for Mother’s Day, which dramatically reduced the number of showings, these overall stats would be much larger:
A 26.1% increase in showings, week-over-week, let’s say could have been 35% if not for Mother’s Day, but you get the picture.
Showings are trending up, month-over-month, week-over-week, and with every passing day.
I’ve noticed a major increase in the proverbial “phone ringing” as of late, and maybe it’s just the restlessness with people in self-isolation, or maybe it truly is a sign that people are ready to get back out there and look at real estate. Either way, I expect our “spring” market to essentially take place this summer, as we continue to ride this momentum through the end of May, and into June.
I’m not here today to make predictions on the Toronto real estate market for the long-term, medium term, or even short term, whether it’s about listings, sales, or price. I’m merely pointing out that the trend for activity is up, and the statistics prove it.
I’ll make point of a follow-up blog in one month’s time to see where things stand.
If I may bend the readers’ ears a little bit, does anybody want to share their plans if they happen to be an active buyer or seller, or one who is going to wait a short while longer?Back To Top Back To Comments