AUGUST 2022

MARKET COMMENTARY JULY 2022

The Toronto Regional Real Estate Board (TRREB) has released the MLS sales data for July 2022. As expected, it was a slow month for real estate sales across the region. With 4912 home sales reported, transactions were down 47.4% year-over-year, and down 24.1% from June. 

New listings were slightly down from the same time last year. At month’s end, there were 15,334 active listings, a gain of 57.6% from a year earlier, and representing a 3.12-month supply heading into August. Months of inventory remain at the highest levels in over two years and continue to rise towards balanced conditions. 

Higher borrowing costs and increased inventory continue to take the steam out of the market, with many buyers taking a wait-and-see approach. As a result, average selling prices are trending downwards. They are now roughly on par with the same time last year and are down on a month-to-month basis.  The average sales price of $1,074,754 represents a 1.2% increase compared to last year, and a decline of roughly $70,000 from June. The MLS Home Price Index (HPI) Composite Benchmark was up 12.9% from July 2021. 

Looking at price by housing type, detached homes sold for an average of $1,362,598. This is a year-over-year decrease of 3.1% and a month-over-month decline of 6.34%. The average price for semi-detached homes was $1,077,750 (+4.9% / -4.18%), townhomes showed an average of $903,899 (+6.3% / -3.12%), and the average price of condos was $719,273 (+6.9% / -3.74%).

The average July sale took place in 19 days on the market, up from 15 days in June, and at 99% of the listing price, down from 100% in June.

Though summer months often bring a lull to the market, MLS sales this past month were at their lowest levels for the month of July since 2000.  Inflationary pressures have significantly impacted home sales, and buyers are demonstrating patience as they track price trends and weigh options. 

Harvey Kalles Real Estate has been in business since 1957 and we bring a wealth of experience to fluctuating markets. Whether you are buying or selling, please speak with a member of our sales team. We are here to lend clarity and insight to the current market conditions. 

What do you do when real estate buyers want deals, and sellers want yesterday’s higher prices? I ask this rhetorically, but this is essentially the challenge of our time right now. It may be more or less of an issue a month from now, but this is often the reality in today’s market.

I am not an economist and I don’t work for the Bank of Canada, but from where I sit, with inflation breaking the 8% barrier, and with gas and groceries going through the roof, another increase in interest rates is likely coming. 

A market slowdown was expected and inevitable. I’ve read how the United States printed more money in the last 24 months than it did in the last 48 years. All G7 countries have acted in similar fashion, Canada included. When you put that much money into a system, you are going to have inflation. So, while I expect that we are in for a soft landing, we must embrace where we are today…”we” being real estate professionals and home sellers. 

So, if you are a seller, then my advice is to focus your attention on selling for the most money you can at this point in time. Again, none of us know the future. You could hold off, and then next month, find that prices have rebounded. Of course, prices may also be less than where they are today. You need to embrace and work with the market that you are in right now. 

Fortunately, many of us buy and sell in the same market. So, while it’s easy to say how difficult it is for sellers right now, never forget that sellers are often also buyers. Unless you’re being transferred to another country, for the most part, we experience both sides of a negotiation in the same market. A seller who is accepting 92% of what they could have achieved just four months ago, is also getting an 8% discount on the home they are buying…and they have more choice, more time, and more say in the terms. Ultimately, your financial experience will be about the difference you pay on both transactions, not about simply the purchase or the sale. 

In my experience, when people are confused, they are reluctant to act. In part, our role as realtors is to help demystify the market for our clients. We are educators who are informed with all the housing statistics that matter most, and we can shed light on a rapidly evolving housing market.

I would encourage anyone reading this to reach out to me or a member of the Harvey Kalles sales team. We will be happy to provide clarity around what’s happening the current real estate environment.