TorontoRealtyBlog

Not even one comment about the new blog?

Geez, guys, I thought we were friends!

And nobody noticed that Monday’s blog extended into Wednesday and that I posted on Thursday instead.

Or maybe you did and you just didn’t care, or didn’t care to comment.

This was both a function of launching the new version of Toronto Realty Blog, as well as TRREB releasing the September stats on Wednesday instead of Tuesday.

Damn you, TRREB.  You messed up my whole week!

Well, I hope you enjoy the new TRB theme, design, and layout more than the last one.  The objective of the new site is to clearly promote today’s blog, the most popular blogs, the blog archives, the blog search function, and everything blog-related.  The last design was looking to promote my expertise, my buying process, my selling process, and my team, but we have a different site for that: Toronto Realty Group.

So I’m taking a step forward by reverting back to the blog’s roots in its simplest form: a place where I can offer informed and honest opinions about the inner workings of the Toronto real estate market, and encourage and stimulate two-way dialogue with anybody who’s interested.

Today, I want to examine the TRREB stats from September, which I have been very much looking forward to receiving!  It wasn’t quite Christmas morning in the Fleming household, but close.  I was able to scroll through the stats on my iPhone, while eating Cheerios with my kids (for the record, I was the one eating Cheerios…), and I was very surprised at some stats, but not quite as surprised at others.

Here are the five figures that are most important to me:

1) 3.4%
2) 11.3%
3) $1,038,668
4) 4,642
5) 29.8%

Without context, these numbers are meaningless.  But by the end of today’s post, you’ll understand.  In fact, I’m willing to bet that some of the more informed among you might already recognize a stat or two, or be able to guess what they refer to…

Let’s start by looking at the GTA Average home price, and I’m going extend this back to the start of 2021 for context, so apologies if this takes up the entire screen on your phone:

The reason I’m including 2021 is because I want to show what prices have, in effect, “reverted back to.”

Some people are painting a rosy picture of the $1,119,428 average home price and saying, “This is great, it’s above last fall.”

But the alternative way of saying that is to look back as far as we can to see when this figure was last matched, and that was September of 2021 when the average home price was slightly higher at $1,136,280.  If we wanted to use the benefit of rounding, we could say, “Prices are back to May of 2021, since the $1,119,428 average home price last month just narrowly tops the $1,108,453 in May of 2021.”

Some people might choose to see this as, “We’ve wiped out two years’ worth of gains,” but others will view this depending on when they purchased.

It could, honestly, be better or worse than that, depending on when you bought.  Then again, depending on when or if you’ll ever sell, all this could be moot.

Only the people that are, or will be, in the market are affected.  Somebody who purchased in 2008 and will sell in 2030 isn’t going to feel any of this.

Now, I had casually mentioned in some circles that I felt September was so slow that we could potentially see a flat price appreciation, month-over-month.  At one point, I may have even stated that, despite the average home price in Toronto never declining from August to September, we might see that happen this year.

I was wrong.

In fact, it wasn’t even close:

The average home price increased by 3.4%, month-over-month, and as you can see from the lack of “red ink” in the rest of the column, we still have yet to ever see a decline in home price from August to September.

But does that 3.4% increase point to a strong market?

I honestly don’t think so.

In fact, I think it points to a very, very depressed summer when, as I wrote in my August TRREB stats post last month, we saw a record decline of 8.2% from June to August.

Part of me believes that the only reason we saw a 3.4% increase, month-over-month, is because of how low the August figure fell.

Speaking of which, if we want to sub-divide that TRREB-wide increase of 3.4% into the five major TRREB districts, here’s how the month-over-month data looks:

Peel, York, and Durham all saw declines from August to September.

Halton was relatively flat.

And Toronto – am I seeing this correctly – went up 11.3%?

Trust me, folks, your home is not worth 11.3% more in September than it was in August.

This is a statistical outlier and I checked the data multiple times.  The August figure of $1,005,945 makes no sense.

To explain, let me show you the GTA-wide average price in comparison to the 416 average home price – keeping in mind that the 416 makes up part of the GTA:

The figures for May and September are almost identical.

But how they got there is a very different story!

Look at how quickly the 416 fell in comparison, month-by-month.

And when we got to August, the GTA figure had declined by 9.5% but the 416 figure had declined by 16.0%!

Madness!

It seems that the 416 kept the average home price from declining last month, and I will be very interested to see where this trend takes us.

Lastly, with respect to price, it’s worth noting that we are further from our “trough” of $1,038,668 set in January of 2023, and those who believed, still believe, or voted in our TRB contest back in the spring that the average home price will decline below that figure, should note that it’s been made a little bit tougher last month.

As for sales, we actually saw fewer properties change hands in September than we did in August, and to me that was very surprising.

However, when I went back and looked at the previous twenty-one years, I saw that in nine of those years, sales declined from August to September:

Yup.

Including last year!

So can we paint a rosy picture about those 4,642 sales?

No, I don’t think so.

Consider that the 5,038 sales recorded in September of 2022 was the lowest in any month of September, ever.

And you can all read, right?  You’ve already noticed that only 4,642 sales were recorded last month?

Yup.

Sales in September reached a new low:

I’m not at all surprised by this figure, and it lines up exactly with what I “felt” out there in the market.

As for new listings, we saw a 32.2% increase, month-over-month, but that’s not actually all that out of line with the prevailing trend:

From 2002 through 2022, the average increase in new listings from August to September is 23.7%.

So while the 32.2% increase, month-over-month, is significant, it’s not an outlier.  We can’t say that listings have “skyrocketed.”  Anything short of a 40% increase wouldn’t move me, and anything short of 50% wouldn’t have me suggesting that there’s a red flag.

Now, we’ve already put context to four of our five numbers.

The average home price increased by 3.2%, month over month.

The 416-specific average home price increased, somehow, by 11.3%, month-over-month.

Our $1,119,428 average home price is still well above the trough of $1,038,668 in January.

We saw a September record-low 4,642 sales last month.

So what is our last figure?

It’s 29.8%.

That, amazingly, is the absorption rate for September, which is well below the previous low:

That’s simply the result of a decline in sales paired with an increase in inventory.

And while properties are being re-listed at a higher frequency, since “offer nights” aren’t working, I don’t think it’s enough to move the needle.

The September Trreb Stats are mixed, to say the least.  And while the average home price did increase by 3.4%, and it is still 3.0% higher than last year, I will remain impressed if the optimistic Realtors out there attempt to paint a rosy picture about the rest of the stats.

Don’t get me wrong, I remain bullish about Toronto’s real estate market both long-term and medium-term, and maybe even short-term too.   But short-short term, as in right now, it’s hard to see these figures and conclude that there isn’t weakness out there.

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