Do you know I’ve written 2,184 blog posts?
Actually, this one makes it 2,185…
I thought it was more than that to be honest, but then I recalled a special feature I did for my “1500th Blog Post” a few years back, and suddenly 2,185 seems in line.
I’m religious about Toronto Realty Blog. I truly am.
From time to time, I check in with a person who I wouldn’t call a psychologist, but also wouldn’t call a therapist, but I’m not sure fits the mold of a business coach, or even a life coach. While the definition of this person’s occupation eludes me, it doesn’t make him any less important in the context of listening, advising, and helping me keep my head on straight.
I’ve identified that I have a lot of “rules” in my life, and while these rules seem outrageous to some, and unnecessary to others, I can’t help but feel that they keep me grounded, and on the correct path.
I don’t drink during the week. I just don’t, I’m not sure why. I don’t have a pint at lunch like so many people I know. I don’t drink a bottle of red with dinner. I have been known to get shmammered alone on Saturday night and spend too much money bidding on hockey cards on eBay, so it’s not as thought I’m a non-alcoholic saint, but rather I just have this rule that I abide by.
I don’t get home before 5pm. Ever. It feels unnatural to me, and even though the whole world does it, I refuse. And the fact that I’m self-employed, and I work weekends, as well as many nights until midnight, doesn’t “even out” the hours worked, and allow me to go home early. I just can’t do it.
And a rule that I have abided by for fifteen years: I blog on Monday, Wednesday, and Friday, with a video on Thursday.
When it was suggested to me that, “Maybe you don’t need to blog on Monday, Wednesday, and Friday,” I laughed. I actually LOL’d as the saying goes, since the suggestion was comical in nature. It was like a colleague asking on Tuesday at 11:30am, “Hey, we’re going for five-dollar martini’s for lunch at the such-and-such pub, wanna join?” Have we met? Yes, so, ummm….
Call me boring, call me rigid, call me inflexible and stuck in my ways. But I have these rules in life that are certainly born of obsessive-compulsive disorder as well as a need for routine, order, and control (if time permitted, I could detail another dozen rules, but I think you see that the first two were intended to introduce the third), and my rules keep me focused. The routine keeps me normalized.
I hate not writing a blog on a Monday. It pains me to look at my mailed-in, cop-out post about going down to Cambridge, but once in a while it’s a necessity. I used to muse, “Toronto Realty Blog doesn’t take sick days,” but man, is life ever busy.
Those of you with four kids – how do you do it?
I have one, and one more on the way in February, and at times, I feel like I’m upside-down.
My Dad told me his theory on kids: “One is great, and two is amazing, but three is like seven.”
Spoken like a man who had three kids, I suppose.
The days seem so much shorter this time of year too. There are still twenty-four hours in each day; that hasn’t changed. But when it starts getting darker at 4:30pm, it’s like the walls are closing in.
In the world of real estate, things have slowed down, but not as much as they used to.
When I first met my wife in 2010, and when we were living together thereafter from 2011 onwards, we had this way of referring to my occupation at this time of year: “DECEMBER in real estate!” That doesn’t sound very descriptive, but I mean that when things slowed down, and I only had a few hours of work to do each day, with a couple of days to escape for Christmas shopping, followed by two weeks at the end of the month without the phone ringing, it was “DECEMBER in real estate, baby!”
Circa 2013, I used to roll into the office around 10:30am, nurse a large Tim Horton’s coffee, write out a dozen Christmas cards to clients, and ease into the afternoon.
Maybe it’s a function of my business expanding, and maybe it’s the market becoming more complex, but things have really changed in recent years, and I honestly do think that the reason December is so much busier than in years past is because of how frenetic the Toronto market has become. The stakes have never been higher, inventory has seemingly never been lower, prices are rising while demand increases and supply falls, and decisions have to be made much faster. Buyers need to hit the ground running, and that is why so many of us agents are slammed in December: the 2020 buyers are already getting their feet wet.
So let’s see: wife, kids, baby on the way, yet another cold, shorter days, busier December, flying to Cambridge for a course when I thought things would be slow – all reasons why, try as I might, I did miss my self-mandated blog post on Monday.
It’s true, I suffer from Catholic guilt. But I’m not Catholic, so explain that to me…
Before I left for Boston last week, I did get a chance to run over the November TREB numbers and I was surprised by a few things. In fact, “surprise” has been the theme of these now-monthly blog posts on Toronto real estate statistics.
I always say that stats-geeks, whether bears or bulls, have a particular stat they want to look at first, be it sales, or inventory, or a particular ratio like SNLR, or price.
This month, I was primarily interested in price.
I’m not a price-junkie, in fact, I usually care more about inventory or SNLR because it sheds more light on why prices are doing what they’re doing, or even where prices are going. But this month, I was curious to know how prices would drop from October.
And would you look at that: I’m already making a prediction.
I mean, prices must drop from October to November, right?
That’s the pattern, or at least it should be. Prices jump up from August to September, as the slow summer leads to the busy fall market. Then demand continues through October when prices continue to rise, but sales are sluggish in November, usually due to lower inventory, so prices drop ever-so-moderately, if at all.
That’s my view of the fall market.
And with the October average home price in Toronto sitting at $852,142, I wondered where this figure would end up in November.
In 2019, we saw the October average home price drop 2.5% to November, from $807,538 to $787,349.
So a similar 2.5% drop in 2019 would result in the average home price dropping from $852,142, which is the highest it’s been since May of 2017, down to $830,838.
An average sale price of $830,838, for what it’s worth, would end up lower than the $843,115 price in September.
In the end, the average Toronto sale price in the month of November came in at $843,637, which is only a 1.0% drop.
This got me wondering about three things:
1) What is the average drop in price from October to November?
2) Have there been months when price does not drop from October to November?
3) How often is November’s price higher than September?
So first, let’s take a look at the average sale prices in October and November for the last decade:
I’ll be honest, I was surprised to see that in two years, 2015 and 2016, the average sale price actually increased from October to November. But then when I thought back to the fall of 2016, which was so insane that it was, looking back on it, one of the major root causes of the crazy spring-2017 market, I’m actually not surprised to see the increased price. As for 2015, call that an outlier, and it’s a rounding error at 0.3% anyways.
Through the ten years, the average change from October to November is -1.1%.
The average drop, for the eight years in which we saw a drop, is -1.6%.
So with the first two questions answered, I wanted to move on to the third.
If I had to guess, I would think that in a ten-year sample, we’d see a fairly even split between years when the November price dips below September, and years where it rises above.
Here’s what I found:
Well, colour me green!
Seven times in ten years has the November sale price risen from September, to October, to November.
In fact, I might have been experiencing a recency-bias, since before 2018 and 2017, in 6 of 7 years, the November price was higher than September. But it just sort of looks that way in my mind’s eye.
So does that mean that sales are higher in November as well?
No, it doesn’t.
Not even close…
Would it surprise you to know that sales, while increasing 10/10 years from September to October, as expected, are actually higher in 8/10 years in September than November?
So price is higher in 7/10 years in November.
But sales are only higher in 2/10 years in November.
Well, I suppose we should look at inventory then?
Well, if this isn’t a trend, then I don’t know what is.
Not only do we see new listings trail off from September to October in 10/10 years, but as per the examination between September and November goes, we see 10/10 years here too.
- Sales increase from September to October in 10/10 years.
- New listings declines from September to October in 10/10 years
- Price increases from September to October in 10/10 years
That logic follows perfectly.
But what then of September vs. November?
- Sales are higher in November than September in 8/10 years.
- Prices are higher in November than September in 7/10 years.
- New listings are higher in November than September in 0/10 years
Again, this logic follows perfectly.
Sometimes, you just feel like pointing out the obvious.
And for anybody out there that still doesn’t believe that supply is lagging well behind demand in the city of Toronto, I challenge you to argue with the above.
Now one final thought on inventory, and this is just mind-blowing to me.
How much lower is inventory in November than in September?
Those numbers are staggering.
For those of you who were buyers in this fall market, I’m guessing you did much better in September than you would have in November.
Not only did you have more choice, but there was less competition, and prices were lower, at least, on average.
The drop in inventory from September to November averages 35.3%, and just look at what happened this fall: inventory dropped 44.6% in two months. And December? Forget about it. December in real estate is a barren wasteland, at least, after this week that is.
Well, that’s it for me, folks.
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