March Stats are out and they support the overheated market theory we keep hearing about in the media. Below are some market statistics along with my findings over the past couple weeks.
A flood of new listings hit the market the week after March Break (for those unfamiliar with the area, this is a holiday week for school aged children). Inventory is still tight however there were significantly more listings over the past couple weeks than any other time this year. Historically, this is a normal time for new listings to increase as people hold back from listing until after March Break however this year somehow felt different. As is the norm these days, many of the recent new listings went above list price in multiple offers HOWEVER, for the first time in months, some actually did not sell on their offer night and were subsequently cancelled or relisted the following day (usually at a higher price point as their strategy to list low and sell high didn’t work). In any other market cancelled listings wouldn't be a huge deal, however this is a noticeable shift from recent months which I take as a signal that perhaps the market is starting to show signs of flattening out. Without any statistics, it is way too early to jump to any conclusions however for the first time in months, I am hopeful that the market may be softening every so slightly.
Below is my rationale (all subjective of course):
1. Some of the highly motivated buyers have finally bought and now their homes are starting to get listed. In the past there was more of a balance of people who would buy first, and others who would list first. Given how much more complicated it is to buy these days, more people are choosing to buy first causing even more pressure in January/February/March than usual. Now that some of these people have bought, there is a little less pressure on supply and demand.
2. Buyers are starting to reach their purchasing threshold. After a 27% increase in 2017 and a 35% price increase year to date, buyers simply can't keep raising their offer price. I think many buyers are simply fed up or priced out and taking a break from house hunting.
3. Media reports and government warnings of possible market interventions are causing buyers to pause to see what if any impact possible restrictions will have on the market
4. Demand for housing tends to go down starting in May/June. The abnormally warm winter and media reporting pushed many buyers to purchase earlier than usual.
Are prices heading down? Not that I can see but I will be interested to see April stats to know if the price increases are starting to level off. For now, all we have are March statistics which show the strongest month yet in the market.
- Overall Average home prices up 29% (TREB) and 36% (OMDREB) vs a year ago
- YTD prices are up 34.6% (OMDREB)
- Current average prices are $1,303,010 (TREB) and $1,394,389 (OMDREB)
- Detached Average home prices up 27.8% (TREB).
- Detached average sale price is now $1,626,066 (TREB). RIDICULOUS, I know. Oakville has one of the highest GTA averages for detached homes. The average detached in Oakville costs more than a detached home in the 416 area code of Toronto.
- Overall Average home prices up 25.7% (TREB) vs a year ago
- Current average prices are $870,326 (TREB) and $872,396 (OMDREB)
- March Detached Average home prices up 27.8% (TREB).
- Detached average sale price is now $1,059,284 (TREB)
*The stats vary depending on the source. Some agents post their listing on the Toronto Board (TREB), some only on the Oakville Board (OMDREB) and some on both so I’m posting both stats here. Burlington March stats include yet another board that hasn’t yet published March results so Burlington stats may vary slightly once RAHB (Burlington Board) issues March numbers. Regardless, it should give you a general sense of the market:
It's interesting to note that the spread between detached sale prices in Oakville and Burlington has been growing year over year. Out of curiosity, I looked at the average sale price in Oakville vs Burlington in 2013. In 2013 it cost just over $200,000 more to buy a home in Oakville. Now that spread is closer to $500,000. You can either see Oakville as being overvalued or Burlington being a bargain. I am interested to see if this gap lessens with time…
I can’t stress enough that prices don’t show signs of going down however I am encouraged by the first signs that the rapid price increases MAY be starting to taper off. I will be watching the market closely this month to see what transpires.