Let’s face it, considering the record real estate markets we’ve enjoyed in Markham, York Region and across the GTA, if you’re a home or condo owner thinking about selling, or you’re looking to buy a home, you’ve probably kept a close watch on the real estate headlines. That’s a good thing. The more you read about real estate markets (including the Stephen Tar Team’s blog!) the more knowledgeable you’ll be if and when you make a move.
If you’ve read some of the recent headlines, you might be a little confused and concerned. After months of news stories talking about new records in the market, suddenly we’re seeing some headlines that aren’t so rosy.
Many of those headlines were based on the latest Toronto Real Estate Board’s (TREB) Market Watch sales statistics for May, 2017. With that in mind, let’s take a look at some of the numbers and why they might have led to the news you’ve been seeing and hearing.
1. 9% Increase in the Average Price of Home
This is one that you might not see too often because the news stories have concentrated on some of the more ‘newsworthy’ headlines. The average price for homes of all types increased by almost 15% between May 2016 and May 2017.
No one can predict where prices will go in the future, but, regardless of the headlines, TREB continues to show price increases across much of the region, which is good news for homeowners.
2. 43% Increase in the Number of Resale Homes on the Market
This statistic was widely reported in the media. Real estate market watchers feel that one of the reasons for the area’s record real estate prices is the relatively low number of homes and condos available to buy.
A 43% increase in the number of units on the market versus May 2016 is good news for buyers who now have more homes to choose from than last year at this time.
It’s interesting to note that, while the number of homes for sale increased, the number is still well below the industry average.
The increase in home listings has been reported in recent stories in comparison to a decrease in the number of homes sold – 20.3% lower in May 2017 versus May 2016. Why fewer sales if there were more homes available? There could be any number of reasons for this, including buyer fatigue from taking part in the competitive market or the new 15% foreign buyers tax and rent controls introduced by the Ontario government in April.
3. 4% Reduction in Home Prices Between April and May 2017
You might notice some news items referring to the fact that average prices for all types of housing in the GTA went down in May compared to April.
First, price reductions from one month to the next are not uncommon and it can be misleading to conclude that a price drop from one month to the next is necessarily a sign of an overall trend in the market. Prices very often go up and down between months for a variety of reasons, including weather, elections, economic news, etc.. It’s why reporting agencies like TREB don’t usually pay as much attention to month-to-month statistics, and track year-to-year statistics instead.
The second thing to consider about any lower prices in May is that, again, it was the first full moth during which Ontario’s new 15% tax on foreign real estate buyers and new rent controls. These measures were designed to take the edge off the spiking market and maybe they are working just as they should.
As we’ve said many times, no one can predict the market. But that doesn’t mean you should stop paying attention and asking questions to stay as informed as possible. If there is anything you would like to know about the local real estate market in your area, please give us a call here at the Stephen Tar Team. We have answers.