TorontoRealtyBlog

Did you know that Arnold Schwarzenegger was my hero when I was younger?

True story.

I was one of the very fortunate few who got to experience this thing called a “laser-disc player” in 1992.

What in the world is a laser-disc?

Well, if you consider that when it comes to music and audio technology, we first had cassettes, and then benefited from the improved technology that compact discs offered, it was the exact same thing for video!  We went from Beta-Max and VHS cassettes to the logical next step: discs.  In this case, laser-discs.

But you’ve never heard of laser-discs, right?

You only know DVD’s.

Well, believe it or not, in between VHS cassettes and DVD’s, there was a short-lived experimentation called the “laser-disc.”

And when my father bought a big-screen TV in 1992 – the type that was about 3-feet thick and wood-panelled on the sides, the forward-thinking techie who sold him the unit, with THX surround sound system, told him he needed a laser-disc player.

“It’s the way of the future,” my old man was told.

My father was also told that the only movie in the world that would really, truly, fully, and confidently display the power of THX in-home surround sound was noneother than Terminator 2: Judgment Day.

I came home one day in September of 1992, and I swear, I could hear it from the street outside!

The floors were literally shaking as the sound of the original Terminator, played by Arnold Schwarzenegger, was revving his Harley Davidson and blasting a shotgun at the T-1000 Terminator, played by Robert Patrick, as the latter character gave chase on an 18-wheeler.

Oh, Arnold!

The greatest action-movie actor of all time, and please don’t tell me it’s Tom Cruise.

In any event, laser-discs were a spectacular failure since not only were they as large as an LP but you actually had to flip the disc halfway through the movie!  Imagine that?  You’re rolling along, in the midst of the action of a great movie and then the screen goes to blue and it says “flip disc.”

I have watched Terminator about five hundred times, no word of a lie.  Yeah, we had Die Hard and Indiana Jones on laser-disc as well, but Terminator was the go-to because of the sound.

To this day, can’t see the word “Terminated” without hearing Arnold’s voice.

When I got into bodybuilding in my early-20’s, I discovered Arnold’s “Pumping Iron,” which I only got a copy of by purchasing a dubbed VHS version off eBay in 2001.  Arnold was a god.  Is a God.  But enough about that.

Last week, all this talk of “terminated listings” on MLS totally stuck in my head.

On Friday night, once my wife was asleep, I watched Terminator on Netflix.

On Saturday night………..once my wife was asleep (what did you expect?), I watched Terminator 2.

And on Sunday, I sat down to collect statistics on the 2022 market thus far and examine listing terminations.

As I mentioned in last Wednesday’s blog post, this article appeared in the Toronto Star:

“Toronto Property Listings Are Being Cancelled At ‘Unprecedented’ Rates”

It got me wondering about the rate at which terminated listings is increasing, since, presumably, it is increasing.

The article noted that terminations are “up 643% since January,” but that doesn’t tell us much, since there are fewer new listings in January than in June.

So in order to understand the market, we want to look at the ratio of terminations to new listings, and we want to look how this percentage compares from January through June, both in the GTA and in individual TRREB regions.

It’s important to note that while “new listings” is a statistic published in the monthly TRREB Market Watch, “terminations” is not.  So I had to use MLS, search unavailable listings by “terminated date,” and then filter by each month.  That’s just in case some of you are wondering where the hell I got this data from.

It’s also important to note that when comparing “new listings” and “terminated listings,” the terminated listings are not necessarily one of the new listings.  You can terminate a listing in August that was put on MLS in July.  What we’re working with here is simply a ratio to be used as an indicator.

So with the pretext out of the way, let’s look at the whole GTA first and foremost:

With only 7,979 new listings in the GTA in January, it’s tough to draw comparisons to other months.

Only 636 listings were terminated, but of course, this could include listings from November or December.

To see only 8% is quite shocking, but then again, who would list in January and terminate in the same month?  List on January 6th and you’re terminating before the 31st?  Not unless you have a failed offer night, but in January that wasn’t happening!

The same can be said for February, which was a busy month, and which only saw a 10% Termination Rate.

By March, that percentage had doubled to 21%, and we can see that the amount has been slowly increasing since then.

The termination rate in June was 36%.  That’s high.  Or is it?

To answer that last question, we need to look at TRREB regions.

Here’s the 416:

The 416 saw a 7% termination rate in January, which is in line with the 8% figure TRREB-wide.

But that’s the only real similarity.

As the termination rate in TRREB increased to 36% by June, it was a mere 20% in the 416.

This must mean that other TRREB regions have been hit harder, right?

Here’s Durham Region:

In both May and June, Durham Region saw a 40% termination rate, compared to 33% and 36% TRREB-wide.

Believe it or not, Durham was not the hardest hit.  That was York Region:

39% in May, 41% in June, and that averages out at 40%, to pull even with Durham Region, but the 35% recorded in April is 2% higher than Durham, and keep in mind – the 416 was only 13%!

Here’s Peel Region:

This is more of the same.

So too is Halton Region, which traces Peel quite closely:

All told, it seems to me that the “suburbs” are seeing far more terminations than the 416.

This jives with what we’ve all heard about failed offer nights, price reductions, and new listing after new listing in Durham, Halton, Peel, and York.

The contrast between these areas and the 416 is shocking, but some might suggest it’s simply not.

In booming times, all real estate in a greater city area is attractive and it’s all hot.

But when the market turns, the central core of any major city always holds its value better, and I don’t expect that to ever change.

Looking at month-to-month fluctuations in the termination rate, and comparing and contrasting TRREB regions is one thing, but how do we really know if this data should look any different than it does?

To answer that, we’d have to compare to 2021.  So that’s what we’ll do next!

Here’s the GTA data for 2021:

Note that January and February’s 10% and 11% are actually higher than 2022’s figures of 8% and 10%.

That’s because 2022 was hotter than 2021, and it seems to reason that there would be fewer terminations.

But the 21% recorded in March of 2022 was well ahead of the 16% from March of 2022.

And the 33% and 36% recorded in May and June of 2022 were way beyond the 20% and 22% recorded in the same time periods in 2021.

This is how we determine if the termination rate in the past few months is “high.”

We know it’s “high” in Durham, York, Peel, and Halton – compared to the 416.

But now we know it’s high in general, having compared it to 2021.

I have the same charts for the five major TRREB regions for 2021, but you don’t want to scroll back up to compare, nor do you want me to write out a slew of percentages.

To truly compare 2021 to 2022, we’ll want to graph these!

Here’s the GTA as a whole:

We noted above how the termination rate was higher in January and February, and then the spread began in March.

But when we look at the 416, the graph is completely different:

I say “completely” for those who will give this more than a cursory view, but note how the lines began to diverge for the GTA-wide termination rate in the month of March, but it took until May to see this in the 416.

Also note that the spread in the month of June is massive in the GTA compared to the 416.

Here’s Durham Region:

How interesting that the termination rate declined from April to May of 2021 (if we’re going to two decimal places…), and thus our blue line looks different than expected.

But damn, look at the gap!

While the termination rate tapered off slightly in June of 2022, and it actually increased in June of 2021, that gap is massive.

Halton Region tells just about the same story:

The gap between the termination rate in June 2021 and 2022 in Durham Region was a full 20%.

But in Halton, it’s “only” 16%, as we saw a 23% termination rate in June of 2021 and a 39% termination rate in June of 2022.

In fact, all the suburb regions tell a similar story.

Whereas the gap in termination rate, June 2021 versus June 2022, was a mere 5% in the 416-Toronto region, it’s anywhere from 15-20% in the suburbs.

Here’s York Region:

That’s a 15% gap in June; from 26% in June of 2021 to a whopping 41% in June of 2022.

For those playing along at home, 41% is the largest termination rate in any area, in any month, in either 2021 or 2022, January to June.

That figure is just astounding.

If you’re a seller in York Region, you have to know that – on average, you have a 41% chance of listing your property a second time, or simply taking it off the market.

Last, but not least, Peel Region:

Note that all four suburb Regions saw the “crossover” in February, whereas the 416-Toronto area saw the crossover in March.

The spread between termination rates in June, 2021 versus 2022, is 15%.

So if we want to use last month – June, as an indicator, we’ll look at the respective spreads in termination rate, June of 2021 versus June of 2022:

Toronto: 5%
Peel: 15%
York: 15%
Halton: 15%
Durham: 20%

Or if you want to put this another way, consider that in June, the termination rate in the 416-Toronto area was 20%, compared to 41% in York Region.

Any way you want to look at this data, you’ll draw two conclusions:

1) Terminated listings are skyrocketing

2) The 416-Toronto region is in a completely different world than Peel, York, Halton, and Durham.

For some you, the preceding was incredibly boring.  I get it.

But for others, you know where I’m coming from, and perhaps a refresher next week, when we have the July data, would be helpful.  Maybe not in the form of a full blog post, but I expect the TRREB Market Watch to be released on Friday, August 5th, so I’ll get my monthly stats blog up for Monday, and we’ll look at the termination rate.

Now, up for debate: it’s 11:45pm and you’re laying on the couch, randomly flipping channels.  You find Con Air on one channel, and The Rock on another.  Both movies are about halfway through.  Which do you watch, and why?

The post Are ‘Terminated’ Listings Out Of Control? appeared first on Toronto Realty Blog.