First and foremost, thanks to all the readers who chimed in on last Wednesday’s post with feedback on, and suggestions for, the new TRB layout.
Features as simple as having a link on the home page on the comment bubble, that takes you past the blog post itself, and directly down to the comments, were so crucial, yet overlooked. Thanks to the readers for pointing out a few things that I should have caught, and a few others that perhaps we can implement.
It warrants another mention: please try out the data hub!
It’s a work in progress, but we have every TREB sale at our disposal, in real-time, and we can do (almost) whatever we want with it.
No, we can’t share the actual sales for properties. TREB will immediately send me a “Cease and Desist,” even though there are a couple of agents out there currently doing it. But as I’ve been told by those in the know, “A ‘nobody’ that’s sending out daily email blasts with sales aren’t going to appear on TREB’s radar.” So I suppose I should feel good about that…..sort of……but not really?
Anyways, save for advertising what a particular house sold for, with the price and address, I can use the Data Hub to publish aggregate data, and the readers can use the tools to gain access to data that they wouldn’t ordinarily have.
For some of the folks that posted feedback last week, let me just say – you need to try it out again. Somebody said, “You need ‘freehold’ and ‘condo’ to be drop-down filters.” Well, they aren’t, but that’s because the pie-chart above is clickable. Once your search results have been returned, click on the freehold, or condo, and it will filter for you.
We’re going to add more filters. Bed, Bath, and Parking on their own aren’t enough.
But as you can see, the results are called instantaneously. There are millions of data points in the backend, and your search is returned in less than a second.
We’ll continue to work on it, but please, post comments or email me with feedback. Let me know what you like, and how we can make it better.
I’m thinking about posting the actual sales from the search result, but without the addresses. This would satisfy TREB rules, but also provide the users with a lot more data.
Okay, so back to the topic at hand.
It’s true, you really can make numbers say anything you want.
And as the readers, pardon the cliché – both “bullish” and “bearish,” continue to banter back and forth, there’s always an opportunity to select numbers and use them to prove your point.
As the TRB readers longed for new material last week and a forum to actually discuss real estate, and not my new layout, they took to the comments section of Wednesday’s post.
Appraiser and Chris had a back-and-forth about what data points to use, and for how long, in order to prove anything concrete about the market.
Innovator, critic, market-disruptor, and trusted-Realtor, John Pasalis, even had his rare bullish sentiments posted in the comments section:
@JohnPasalis
Jul 10
“If the real estate bears out there can point me to any recent analysis (past 3 months) that argues why Toronto’s housing market is going to get worse in 2018, I’d appreciate it. Curious to read what others are finding because I don’t see any downward trend.”
And having just come out of a busy Spring market, I would have to agree.
You know I’ve always maintained that there are ways in which I measure the relative strength or weakness of the market:
1) Look at market statistics
2) Draw from my own experiences
There are times when these two measures don’t align.
In the past, I’ve spoken about a red-hot market, ripe with multiple offer situations, when the average home price is downtrending, or inventory is up, or days-on-market have increased.
So when June ended and I took a look at the market data, I was honestly a little surprised by what I found.
I’m a bit late to this party, given it’s mid-July, but the blog re-launch had my hands tied. And I think I’d be remiss if I didn’t go back and look at the June stats, and share what I personally felt was the biggest take-away.
The average home price in Toronto increased by 0.32% in June, over May, and that in itself is quite unspectacular.
In the City of Toronto, that increase was 1.00%, which again, seems insignificant, although it’s worth noting that any investment that returns 1% per month, if done so in perpetuity, is nothing to sneeze at.
Before somebody suggests that I’m making more use of the “City of Toronto” statistic, compared to the GTA average home price, so far in 2018 compared to years’ previous, let me explain why.
While I’ve sold houses as far north as Keswick, as far east as Ajax, and as far west as Burlington in the past 12 months, this is Toronto Realty Blog, and 95% of my business is in the City of Toronto. My readers, for the most part, care more about what’s going on in the central core than they do about Kawartha Lakes or Scugog. So the “City of Toronto” numbers just seem to hold more water than the GTA-number, which as of late, is not a good indicator of what’s happening with your King West condo, Don Mills detached, or Beaches townhouse.
But just for comparative purposes, I’ll look at both numbers today in the chart below.
The May-to-June increase in average sale price of 0.32% in the GTA and 1.00% in Toronto might not surprise many of you, but they should.
Think about the market cycle just for a moment.
We start the year in January when it’s cold and dreary, when we’re coming out of the slowest month on the real estate calendar, and when sellers are just starting to list, so buyers are taking their sweet time becoming active.
February is a short month, but often a busy one, as the folks who started their searches in the New Year are making bids, and the folks who didn’t buy the year before are very active.
March is typically a hot month, and it leads us into the two busiest months of the year: April and May.
While September might have something to say about that, I would argue that April and May represent the “peak” of the market, both in terms of buyer/seller activity, but also price.
Then comes June, when things slow down a little.
School is out, vacations start, and most buyers have already bought, as most sellers have already sold.
June is a historically busy month, but not compared to May.
And this is why I was so surprised to see the average home price in Toronto actually increase from May to June, even if ever-so-slightly.
0.32% is nothing to write home about, but it’s significant for one major reason: it hasn’t happened in the last eight years.
TREB re-districting only enabled me to go back to 2011, but take a look at how the average home price in May compares to June, in both the GTA and City of Toronto:
If that isn’t the very definition of an “outlier,” then I don’t know what is.
When I wrote my June, 2018 e-Newsletter, I actually predicted that the average home price would decline. I figured that with increases every month from December through May, a drop in average home price in June was inevitable.
How couldn’t it be?
June is just a slower month than May, plain and simple.
My prediction was made based on my gut, not on these stats, which I actually didn’t compile until this past weekend.
So add me to the list of people who are surprised to see all the red numbers up there, followed by those in 2018 in the black.
The average home price in Toronto always drops from May to June. That is what these numbers are telling us.
And these aren’t exactly small numbers either.
The GTA-numbers on the left might be less volatile, but look at the City of Toronto – even without the massive 7.81% decline from 2017, when the market was weak from April onwards, we have two years over 5%, and from 2011 to 2017, the drops average 3.97%.
So while the 0.32% and 1.00% increases in the GTA and City of Toronto, respectively, don’t seem like much on their own, they represent an absolute breakthrough for the market.
My “gut” told me that June was okay, but it didn’t feel like March or April out there. I had some barnburner condo sales, but I felt as though the freehold market had dropped off significantly.
I had two tough listings in June, both under-priced with “offer nights,” both which only got one offer.
I’m pleased to say that I was able to get $150,000 and $95,000 respectively over-asking for each property, but the sellers in both cases were distraught that only one bidder showed up for their home.
These sales, I felt, showed me that the market had, in fact, slowed a little.
And throughout June, I continued to “feel” that the market had pulled back ever-so-slightly.
“Averages” are not exact measures of the market, but overall, it looks as though June was actually a very strong month, even if I had a couple of listings that didn’t produce the desired response.
So I guess the next question is: where do we go from here?
The GTA-wide average home prices in April, May, and June were $804,584, $805,320, and $807,871 respectively. That’s some kind of consistency!
July has to be slower than June, and although the chart above would dictate that looking at what’s happened in the past is no real measure of the future (at least in 2018), I have to think that we see the average home price in Toronto dip back down to $790,000 through August, before we head into a typically busy fall.
The average drop in price from June to July from 2015 to 2017 was 4.69%, 4.92%, and 6.01% respectively.
But based on the exceptional consistency in April/May/June, and the trend-breaker we just analyzed in June itself, I can see July and August being busier than normal.
It all lines up for what should, or at least could be a very busy Fall, 2018 market.
Ralph Cramdown
at 7:57 am
All sales mix, guy. Detached prices fell 5% from May to June in the 416, and fractionally in the 905, just like usual.
Looking at aggregate average prices without separating the VERY different experiences in the condo and detached market may have some merit, but paints an incomplete picture.
What is normal? This blog has chronicled the insanity of the last few years. If I may paraphrase: 2015: “This spring is NUTS!” … 2016: “OK, last spring was pretty nuts, but this spring is REALLY Nuts!” … 2017: “Insanity!!!” But everyone in the industry adjusted to it, and it became normal. Now sales are down, and everybody in the industry is out calling bottoms and predicting busier markets and higher prices trying to get back to “normal” sales volumes so they can pay their higher car leases and their cash flow negative investment condos. Look at the numbers. Adjust for population and inflation, and June dollar volumes were normal. Get used to it.
Tommy
at 9:31 am
Precisely.
A
at 8:52 am
I am not in the industry but look at sales data daily just for interest. June felt weak. More than half the data points for SFH that I saw seemed to have gone quite a bit below listing. Seems like a sales mix issue per Ralph C. However, even if it is sales mix, bulls might be encouraged the higher end of the market is picking up in terms of activity.
FDP
at 11:10 am
Hold on a minute… what if the next interest rate hike isn’t a hike…but the banks lower rates? Been known to happen. Boom. Business as usual. Let’s see what new Ontario government can work out for us here in the golden horseshoe of Canada. Stay positive people. Cheers David for your perspective, after all your walking the talk, boots to the ground and I appreciate that. Keep on.
Kyle
at 3:52 pm
Thanks David. While not everyone does, I for one appreciate your market commentary, as it’s proven to be very astute in the past. Which is far more than can be said about many people.
July too looks to be building on the strength of June:
“Two weeks into July and GTA house/condo sales are up 13% over last year. Prices are up 2% and new listings are down 6%. The increase in sales was largely driven by detached sales up 16%. In York Region sales were up 24% over last year.” John Pasalis
If you look at Zolo, 416 is currently up 10.5% Y/Y and prices across all housing types are up Y/Y.
Yes these are compared to 2017 post-FHB prices, but similar to how June bucked the normal seasonal drop, July is looking to be unusually strong.
Appraiser
at 4:27 pm
The sooner the bears learn to accept the reality that the correction is in the rear view mirror, the better. Bitter dreams of a housing crash have been crushed.
To quote @Ralph: “get used to it.”
Long Time Realtor
at 4:46 pm
Pent-up demand?
Chris
at 4:53 pm
I’m not so sure about that. Using sales volumes as a proxy for demand, it’s only a hair above last year, and remains well below the 10 year average.
http://creastats.crea.ca/treb/images/treb_chart01_xhi-res.png
Maybe there’s pent up demand that hasn’t purchased a home yet? But that’s harder to quantify.
Long Time Realtor
at 5:51 pm
New listings declining, while sales are increasing is a fair proxy for increased demand.
Chris
at 6:02 pm
I’ve previously discussed why New Listings is a poor metric (re-listings, etc.), so instead look to Active Listings to assess supply. Active listings up from last year, running above the 10 year average.
http://creastats.crea.ca/treb/images/treb_chart03_xhi-res.png
Meanwhile, sales are at their second lowest since 2009, and well below the 10 year average.
http://creastats.crea.ca/treb/images/treb_chart01_xhi-res.png
As a result, months of inventory is above 2.5, which while low, is once again the second highest level since 2009 and above the 10 year average.
http://creastats.crea.ca/treb/images/treb_chart04_xhi-res.png
As such, I don’t quite buy the “pent up demand” narrative. Maybe there’s demand waiting in the wings? But so far, doesn’t look like they’re buying.
Chris
at 8:43 am
Sorry LTR, I typed you a reply and when I went to post it, it didn’t seem to get posted?
Anyways, the main points I brought up were that:
– I don’t rely much on new listings, due to how it can be skewed by re-listings, etc. I tend to place more value on active listings as a proxy for supply
– Looking at active listings, June 2018 increased year over year, and is above the 10 year average
– Sales activity, as discussed previously, is at it’s second lowest level since 2009, and well below the 10 year average
– As such, Month of Inventory is above 2.5, which while admittedly still low, is the second highest level since 2009, and above the 10 year average
http://creastats.crea.ca/treb/
There may be pent up demand waiting in the wings, but it doesn’t appear that they have moved to buy. Supply seems to be higher and demand seems to be lower.
Chris
at 4:52 pm
You’re like a caricature of a raging bull, appraiser. It’s almost comical.
Everything David and Kyle said is completely fair; the market is showing some signs of resilience, moving from Spring into Summer, but we are still well below the peak attained in Spring 2017.
http://creastats.crea.ca/treb/images/treb_chart05_xhi-res.png
Both have made educated guesses as to where the market is going. I don’t share their viewpoint, but at the end of the day, none of us really knows what is around the corner.
Then you come barging in, shouting about “Where’s the crash!?!?”, confidently declaring that any downturn is behind us and that the future portends only continued appreciation. It’s absurd and truly adds nothing to any discussion.
Anyways, I look forward to your posts when the July 2018 Market Watch comes out, and you proudly declare that the market is surging because it’s up YoY (due to being compared to the dismal average price of July 2017). The rest of us with an iota of sense will know to disregard your comments, and instead look for the more well-formed commentary of David, HousingBear, Kyle, Ralph, A, etc.
Appraiser
at 5:48 pm
Seems you’ve wasted a good deal of time “disregarding” my comments.
Maybe should ease off on the hissy-fits for a while and learn to accept reality (and defeat) graciously.
Chris
at 5:58 pm
Oh, I know it’s fruitless debating with you. Every time your arguments are picked apart, by anyone, you just slink away and don’t reply. But I keep doing it, if only to continue demonstrating the logical failings of your comments and thus why they should be disregarded by everyone else.
Yet again, pointing out that you don’t have a crystal ball isn’t a hissy-fit. Nice try with the deflection though.
Appraiser
at 5:59 pm
Financial Post: “Toronto’s 17% surge leads Canada’s biggest gain in home sales this year”
https://business.financialpost.com/real-estate/crea-reports-june-home-sales-down-10-7-from-year-ago-but-up-from-may?utm_campaign=Echobox&utm_medium=Social&utm_source=Twitter#Echobox=1531752032
Chris
at 6:09 pm
“Actual (not seasonally adjusted) activity was down almost 11% compared to June 2017. Sales marked a five-year low and stood almost 7% below the 10-year average for the month of June
Within the GGH region, price gains have slowed considerably on a y-o-y basis but remain above year-ago levels in Guelph (+3.5%). By contrast, home prices in the GTA, Oakville-Milton and Barrie were down from where they stood one year earlier (GTA: -4.8%; Oakville-Milton: -2.9%; Barrie and District: -6.5%).”
http://creastats.crea.ca/natl/index.html
You really should try to read things in their entirety, pal.
Ralph Cramdown
at 11:15 am
You have to admit, though, that watching Appraiser’s reappraisal, from “You can’t time the market” and “market timers get crushed” (up to last year) to the new “bottom is TOTALLY in!” and “Correction is in the rearview mirror!” is entertaining, no?
I wonder if this represents a fundamental shift in Appraiser’s thinking about whether markets can be timed?
Chris
at 11:49 am
Exactly. Hence, why I said above, he’s like a caricature of a raging bull. Good for comic relief, not to be taken seriously.
“The bottom is in! There is, and will never be any crash! TO RE to the Moon! Buy now or be priced out forever!”
Almost sounds like the cultists who were pumping Bitcoin circa Dec. 2017.
Appraiser
at 3:10 pm
TREB 2nd quarter 2018 condo sales and rental data released today:
“The average selling price for condominium apartments sold through TREB’s MLS® System in the second quarter of 2018 was up by 5.4 per cent year over-year to $561,338.
The highest average selling price was in the City of Toronto, at $603,480 – up 6.5 per cent
compared to Q2 2017.
The average one-bedroom condominium apartment rent increased by 10.4 per cent on a
year-over-year basis to $2,055 in Q2 2018.
The average two-bedroom condominium apartment rent increased by 8.8 per cent on a
year-over-year basis to $2,755 in Q2 2018.”
Chris
at 3:35 pm
Thanks for our daily news bulletin, appraiser. No Pasalis quotes today?
Anyways, while TREB has comprehensive data on home resale activity (realistically, the vast majority of sales likely transact through the MLS), the same cannot be said for the rental market. A significant volume of leasing activity takes place through other channels (e.g. Kijiji), therefore never making it into TREB’s analysis.
Appraiser
at 4:45 pm
“The funny thing about bears is that when the numbers don’t support their narrative – they’re no longer relevant.” ~John Pasalis
I know the turnaround is tough to swallow… my condolences.
Chris
at 4:55 pm
Ok appraiser, since you’re so sure of yourself, why don’t you quantify your confidence, like Kyle did? When will we re-attain the peak GTA average price that was reached last year?
I look forward to your prediction!
Harold (not the jewelry buyer)
at 5:02 pm
Do you have an inclination that Kijiji’s rental data is in any way contrary?
Or are you just ‘talkin out your ringpiece?
Chris
at 5:06 pm
Read more carefully, Harold. I said TREB’s rental data is not as comprehensive as their resale data, because of the availability of alternative avenues for renting homes. Nowhere in there did I comment on Kijiji’s data being contrary, or ringpieces. You stay classy, pal.
Harold (not the jewelery buyer)
at 5:34 pm
Sorry mate, love to debate endlessly with you about suppositions and factoids and maybe’s and such and such, but I have a “classy” class at 6 pm – Cheerio.
Chris
at 5:44 pm
Ah, got it, you like to swoop in, misread, make a rude comment, then take off. Have a great class.
Kyle
at 5:10 pm
Here are Padmapper’s rents across Canadian cities for June.
Median Toronto 1 bedroom = $2,080 up 0.5% M/M and up 15.6% Y/Y
Median Toronto 2 bedroom = $2,800 up 2.6% M/M and up 15.2% Y/Y
http://dailyhive.com/vancouver/average-cost-of-rent-canada-july-2018
Chris
at 5:22 pm
Do you know Padmapper’s methodology? Apparently they previously included short term rentals, but they now state they don’t, so that’s good. But I can’t seem to find which sources they’re using for rental data? If it’s MLS then it would be equally as comprehensive as the data TREB publishes.
Get Real
at 6:46 pm
Yeah. Because you know…methodology.
Quit ‘pissin into the wind pal – you’re all wet.
Chris
at 6:54 pm
Stick to one alias, appraiser.
Kyle
at 10:22 pm
https://blog.padmapper.com/2017/09/11/our-methodology-empowering-the-renter-with-data/
Does not include mls data
Chris
at 11:08 pm
Thanks Kyle, appreciate the link.
I’m a bit unsure after reading their methodology if they do or do not include MLS data?
If it does not include MLS data, certainly would increase confidence in the reporting that two independent and non-overlapping sources found very similar figures.
Idalia
at 3:01 am
Normally I’m against killing but this article sleruhtaged my ignorance.