The Bibby Group | February 2024 Newsletter
After a lacklustre finale to 2023, increased market activity early in the year has sparked renewed optimism. Although it is encouraging to see carry-over inventory from last year finally trade hands, we still see signs of a hesitant buyer pool expecting inflation to recede as we move through the year. As pressure mounts for those on the lookout for interest-rate cuts in the coming months, home values have noticeably declined, and supply is levelling out. This dynamic has bolstered home buyers’ confidence to return to the marketplace. Indeed, transactions in the central condominium market were up approximately 37% month over month, while detached homes remained balanced due to low yet stable supply, which is typical for this time of year. Many of our listings in January benefitted from a steadily increasing number of showings and repeat visits (second showings)—a clear indicator that demand has improved.
After the Toronto Real Estate Board released its latest Market Watch report this week, many media outlets commented on a market that has come “roaring back to life.” What we need to remember, however, is that the data were in comparison with January 2023—which wasn’t a particularly inspiring time for our real estate market. Depending on what you’re reading or following these days, you’ll see market data outlining that condominium sales are up by 51% from this time last year, while prices are down 2% from this time last year.
A more meaningful measure, in my opinion, would be outlining that condominium values are down 9% from the peak (spring 2023), while transactions at that time were 48% higher than present. On the freehold side, we can see that the year-over-year numbers show detached home values are up from this time last year; however, from the peak (spring 2023), they are likely still down by 16%. The lesson here is to pay close attention to the fine print. A more suitable narrative would be that our marketplace once again has a pulse but still has ground to make up.
It’s encouraging to see a recovery happening in a marketplace that has been precarious for many sellers. As the pace of Toronto’s real estate market continues to pick up, I approach the coming months with cautious optimism given that immediate signs of improvement are always accompanied by a new wave of inventory, especially with a traditionally busy spring season around the corner. If supply levels remain moderate, we should have a steady path into the second quarter.