Since last summer, I have been telling you every month that prices are stabilizing in the Toronto housing market.
When things happen over a longer period of time, it becomes a trend.
So in last month’s update, I predicted that we have pretty much hit the bottom of the market because prices have been stable for more than 6 months.
The February market report just came out a few days ago.
It is showing some very interesting data and this could be the start of a new trend.
Let’s take a look at the average prices of detached homes over the past 12 months.
February 2022 was when we saw the peak.
The average price of a detached home was almost $1.8 million dollars.
Then the market crashed.
Prices dropped 25% in just 5 months.
After the steep dive, prices stayed more or less flat for 7 months.
Keep in mind that the interest rate kept going up during this period of time, but prices remained flat regardless.
This is a sign that the market has adapted to the higher borrowing costs.
Besides, the Bank of Canada signaled a pause on rate hikes after the January hike.
In response to that, the housing market has changed its direction.
Average detached prices are up 7.3% in February compared to January.
Let’s take a look at the condo market.
The general trend is similar to the detached market.
But the crash in the condo market was much smaller.
The biggest price decline was around 10% versus 25% in the detached market.
You can see that the market has also turned its direction in February.
Overall, sales activities have also increased 54% in February compared to January.
Of course, if you compare the numbers with the peak last year, both prices and activities are still way down.
And one month of data is definitely not enough to say that the market has turned around.
But this could be an early sign that the market is once again climbing back up.
I can tell you that we can feel an obvious shift in market dynamics in our front end sales.
Our listings are suddenly selling a lot faster than before and buyers are out hunting again.
The Bank of Canada just made the interest rate announcement yesterday.
As expected, they are holding the same interest rate.
Would this be another encouragement for buyers to return to the housing market?
We will find out soon and I will definitely keep you posted.
So if you want to know where the market is trending, make sure you subscribe and hit the bell now.