April saw a rush of homeowners looking to cash in on optimistic buyers, and the detached segment was no exception. According to the Toronto Real Estate Board (TREB), listings of detached homes surged to a multi-year high. Despite the flood of inventory, prices continued to increase, and sales continued to decline.
Detached Prices Increased
Detached homes in the Greater Toronto Area (GTA) are seeing large price increases from last year. A benchmark detached, that’s economist for a typical detached home with luxury bias removed, is now $1,042,100. This represents a massive 33.03% increase from last year. In the proper City of Toronto, the benchmark detached rose to $1,226,300. Despite an increase in listings, buyers are bidding aggressively for the current inventory.
Average prices are seeing steep climbs as well, just not as high as the benchmark. The average detached sold in the TREB board was $1,204,262, a 24.3% increase from last year. Breaking that down, the 416 saw an average sale prices of $1,578,542, 25.2% increase from last year. The suburbs, aka the 905, saw an average detached sale come in at $1,098,827, a 24.5% increase. Even with a slightly “cooler” market in Toronto, all measures continued to show prices climb.
Detached Sales Declined
Sales of detached units declined across TREB. The whole board saw 5,715 sales in April, a 5.1% decline from the same time last year. The 416 saw sales drop more rapidly, with just 1,268 sales – an 8.7% decrease from April 2016. The majority of the sales were in the 905, where 4,447 sales occurred, a 4.1% decrease from last year. Sales are expected to decline as prices climb, so by itself this isn’t as big of a deal as some might believe.
New Detached Listings Increased…A Lot
This is the big red flag of the report, sellers showing up in droves. New listings for detached homes surged 50% to 11,863 last month. The largest segment of those were in York Region, where 3,190 of those listings went live. This represents a 51% increase from the same time last year. Yep you read that right, 51% more people want to sell this year… Declining sales and an increase in listings can cause an imbalance very quickly, so this is a trend worth watching.
While declining sales aren’t that big of deal, when met with an increase of inventory – it could present a serious problem. A flood of inventory with softened demand (sales in this case), can lead to less aggressive pricing. Although one month is too little to say the market is changing, if I were looking to sell anytime soon – I’d probably be consulting an agent right now.
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