I realize that what had become an unofficial monthly feature here on Toronto Realty Blog – some sort of “stats roundup” or post about the numbers from the past month, had fallen by the wayside of late.

March was busy, April was busier, and May is just nuts so far.

But I’d be remiss if I didn’t sit down and examine the recent TREB numbers, thus allowing the readers to debate and fling a little mud, and so I set some time aside on Tuesday morning to ensure I don’t miss yet another month with this feature.

Anecdotally, I can tell you that this might be the busiest month I’ve ever had.

I’m not a “listing agent” per se, in that I don’t have billboards and garbage cans in a neighbourhood, and sit on the PTA, while handing out ice cream in the park in attempts to woo the area residents, and yet l still find myself with some 13 listings this month.

Where did all the activity come from?

A few of the listings are coming from clients who bought, and now need to sell.

But the majority of listings are merely “sellers” in the traditional sense.

Tis the season for selling, as the real estate calendar goes.

Ask anybody with an iota of real estate knowledge, “What do you think is the busiest month of the year in the real estate market?” and I would hazard a guess that an overhwelming majority of folks would answer, “May.”

Some might suspect it’s June, which is warmer, prettier, and people might be marginally happier, and ready to transact.  Some might suspect it’s September or October, which are typically very busy months in a shortened Fall “season” for real estate.  April is a good month, as is March, but May, historically, has been something otherworldly.

I told my wife toward the end of April, “We need to be on the same page for the month upcoming,” and warned her about what lay ahead.  Anywhere from 12-15 listings, which means upwards of 15 “offer nights,” plus somewhere in the neighbourhood of 10-20 offers for buyers.  That means one full Saturday of work, the odd half-day on Sunday, and a lot of nights where our dog, Bella, will have to stand in for me.

I felt as though 2019 started slowly, even though the numbers pointed towards a busier-than-usual few months to start a year, and now I see the market ramping up big-time.

I don’t know if it’s going to top out in May, or continue into June, but what I’m seeing, and certainly what I’m experiencing with myself and my team, points to a potentially chaotic month.

When I sat down to look at the April numbers, my eyes first went to where they always go: price.

How can a person not start there?  It would be like taking a bite of your side-salad before you cut into your steak.

But after looking through sales, active listings, new listings, days on market, and looking at the Home Price Indexes as well as some of the 905 data, what I’m seeing, in my humble opinion, is a month of April that showed a re-energized real estate market.

Let’s leave the sales and listings for another day and rather focus on price, although it bears mentioning that with sales up year-over-year, and active listings down year-over-year, it’s no wonder prices increased.

The average home price in Toronto in April was $820,148.

This is significant for two reasons, with the second being far more important than the first.

For starters, this represents a 4.0% increase, month-over-month, in the Toronto average home price from March.

Monthly fluctuations aren’t the best measure of the market, but it’s somewhat hard to ignore.

For those that want to suggest it’s meaningless, you can, and you might be correct.

The average home price increased from $748,328 in January to $820,148 in April – an increase of 9.6%.

The average home price increased, during the same time period in 2018, from $736,783 to $804,584 – an increase of 9.2%.

But the second reason why I think this $820,148 number is significant, is because it’s the highest average home price we’ve seen in quite some time.

How long is “quite some time?”

Just ponder it, for a moment.

How about………..23 months?

Really?  Does that sound right to you?  The $820,148 average home price we saw this past month is the highest in 23 months?

Yes, it is.  Since May of 2017, which was the sub-peak of that incredible spring, 2017 market that we all remember.

Now here’s where the bulls and the bears both get to make arguments.

The bulls will say that, as I have described above, this is the highest point in 23 months.

The bears will say that the $820,148 average sale price is an absolute joke, when you consider the “peak” was $920,791 in April of 2017.

And I believe that both have a case.

Let’s look back at the average sale price since the start of 2017:

Yes, a far cry from the spring of 2017, indeed.

We all know where the market was back then, although even the most vicious market bear must admit that it sure doesn’t “feel” like we’re off by 10.9%.

In the 905?  Sure, and probably more so.

But in the GTA?  On average?  I don’t feel it.  I don’t see it.  And while the numbers tell me I’m positively incorrect, my point is that this chart is a classic case of your eyes playing tricks on you, because it’s not telling an accurate story of where the market is today.

Now the other point I would make, or rather number(s) that I want to highlight, is with respect to the $800,000+ number.

Every year starts slow, and low, so the $748,328 average sale price we saw in January came as no surprise.

But the market has worked, and worked, to get over the $800,000 number – a number that seems insignificant, relative to the $920,791 peak, but actually holds more value than you might think.

Let me re-colour the same chart above, as follows:

The line under May-2017 shows us the last time that the average home price was over $800,000.

The yellow highlights show us the months that were over $800,000.

And if you count up the months in between May of 2017, and this past April of 2019, you’ll note that in the span of twenty-two months, only FOUR times was the average home price above $800,000.

And now we return, once again.

The spring of 2018 showed us a very flat market – $804,584, $805,320, and $807,871 in April, May, and June respectively, which is the busiest 3-month stretch of the year, as well as likely three of the busiest four months of the year as well.

What I’m curious to see, with respect to this April, May, and June, is whether:

a) The “flat growth” trend will continue, and we’ll see $823,129 and $825,270 in May and June, or
b) We’ll see a May-spike, something along the lines of $840,000

After looking at the average sale price in Toronto, I wanted to look specifically at the 416.

As noted in this space many times before, and as I would believe is common knowledge, the 416 has not been hit anywhere near as hard as the 905 since prices dropped in early 2017, and with condo prices in the 416 up substantially, as well as many other freehold pockets, some might argue the 416 has been a wash in the past two years.

The numbers don’t back that up, but they do come close.

The average 416 home price in April was $903,992, although this actually does top May of 2017, and only falls short of April, unlike with respect to the overall GTA-wide average.

But I wanted to compare the 416 to the GTA, in terms of a “decline since the peak” just to hone in on where things really stand.  So I put this together:

Lots of red!  Like blood in the water!

And maybe a little redundant, but it paints a pretty picture.

The average home price is down in every month since the “peak,” otherwise it wouldn’t be the peak!

But with a return to the highest average home price in the GTA since May of 2017, we can see that the decline is now “only” 10.9%, and that’s probably made up of some 30% declines and 15% gains.  It’s an average, after all.

Specifically in the 416, we see that the decline is less than half as large, as we’re now off only 4.2% since the peak.

More notable is a comparison between April’s.

The GTA-wide decline of 10.9% in April of 2019 is only 1.7% less than the 12.6% in April of 2018.

But the Toronto-wide decline of 4.2% in April of 2019 is 4.1% less than the 8.6% figure in April of 2018.

This tells us that not only has the 416 experienced a much lower decline, but it’s recovering at a far faster pace.

I would show you the 905 stats, if only TREB tracked them in an easy-to-find number, like those above.  But just know that if the 416 is down 4.2%, and the GTA, which is partially made up of that 416, is down 10.9%, then the 905 must be somewhere in the 15% neighbourhood.

My last examination of price is going to be through the TREB Home Price Index, or “HPI.”

For those of you that don’t know what the HPI is, this video will explain it better than I can:

The TREB HPI is essentially a “smoother” average, with the volatility removed, while still painting an accurate picture of the market.

You could compare it to how a “simple moving average” is a cleaner, smoother line than simply a day-to-day closing price in the stock market.

In this chart, I’m going to look at the increase/decrease in each month, relative to April of 2019:

The first thing you will undoubtedly see here is just how much less blood-red there is!

But also note just how much smoother these figures are.

Working backwards, you’ll note that the two HPI figures move in tandem: 1.3% and 1.2%, 2.8% and 2.5%, and so on.  In fact, the GTA-HPI increase is actually higher in the past two months than the 416.

But as you start to move into last fall, you can see how the numbers start to move apart.

Once you get into 2017, you’ll notice that the HPI in the 416 is has essentially increased at twice the rate of the GTA.

If you’re wondering why the April, 2019 416-HPI is higher than the “peak” back in 2017, then you need to watch the video above.  As I said, this is a less volatile figure, and some say a better measure of the market than the overall average sale price.

Some may disagree on that last point, and you can go as far as to suggest it’s cherry-picking data.

But you can’t disagree with the fact that the larger the data pool, the less volatility, and thus a month-over-month increase or decrease isn’t as reliable, and doesn’t paint as realistic a picture, as a year-over-year figure.  From that logic, it’s not unreasonable to suggest that the HPI paints a fair picture of the overall real estate market and it’s conditions.

Are real estate prices up 7.0% since April of 2017?  No.  But that’s not what the HPI is saying, so let’s be clear about the two figures, and what they demonstrate.

All in all, I would say that unlike in January and February when my feelings about the market were not backed up by the statistics, I’d say that these figures are exactly what I expected to see for April.

In case it’s not obvious already, I expect prices to continue to push upward into May, and even into June.