Home ownership Market Activity in November continued to be influenced by higher borrowing rates compared to this time last year, which has created a short-term shock in the market.
The housing types with the greatest impact of declined sales and prices have been the more expensive segments, including detached homes.
Toronto & GTA
The Greater Toronto Area (GTA) housing market unfolded as expected. The number of January sales and the overall average selling price were similar to December 2022. On a year-over-year basis, both sales and prices were down markedly, continuing to highlight the impact of higher borrowing costs on affordability over the last year.
3,100 sales through TRREB’s MLS® System in January 2023 – in line with the December 2022 result of 3,110, but down 44.6 per cent from January 2022.
The average selling price for January 2023 at $1,038,668 was slightly lower than the December 2022 result and down by 16.4 per cent compared to the January 2022 average price.
2023 Market Outlook
Higher immigration levels and increased borrowing costs are two forces that will impact the housing market in 2023. TRREB is forecasting:
- A total of 70,000 sales. This is below the 2022 result, but we will see marked improvement in the second half of 2023.
- The average selling price will reach $1,140,000 for all home types combined. This is down by 4% when compared to 2022 as a whole.
In the first half of 2023, the housing market is expected to remain relatively stable, with flat home sales due to lingering effects of higher borrowing costs and economic uncertainty. However, in the second half of the year, a gradually improving labor market and decreasing fixed mortgage rates are predicted to prompt an increase in homebuying activity.
During the first half of 2023, home prices in the Greater Toronto Area are expected to remain steady, reflecting the trend since August 2022. However, increased competition among buyers in the second half of the year will put upward pressure on prices. The more affordable segments of the market, such as condominium apartments and townhouses, are expected to experience the initial price recovery phase.
The GTA population is projected to grow at a record pace in 2023, driven by immigration, which continues to be the largest contributor to the region’s growth. As new households seek to take advantage of the GTA’s cultural and economic opportunities, the demand for housing will increase. While many immigrants have a higher likelihood of eventually purchasing a home, initial affordability concerns may result in a higher demand for rental properties. This trend will contribute to an already competitive rental market, leading to an average annual rent increase in the double digits.
January 2023 Residential Sales in Muskoka were down by -41% on non waterfront properties and up 23% on waterfront listings year over year.
Sales in the Condo sector were down -33% in the non-waterfront sector and were down -50% in the waterfront sector this January over last
Total Residential Listings were up by 76% on non waterfront properties and down -29% on waterfront properties compared to January 2022. Month-end there were 130 active residential listings on non waterfront and 117 active residential waterfront listings.
Listings priced competitively continue to sell with a median number of days on market of 45 (non waterfront) & 63 (waterfront).
The Muskoka Median Residential sale price was down -3% (non waterfront) and down -15% (waterfront) year over year.
When we report there are no recorded sales it often means there were accepted offers that went firm and are in the pending status however did not close during the month so therefore are not considered closed sales.
There is a shifting of the market and with that comes a different mindset requirement for Sellers. While it may feel that you are not making as much as you think you should you are not losing. If you are selling and buying now the numbers are still comparable verses a market where your sale price is low but the purchase price is higher.
While as a Seller you may not see the same frantic activity as earlier in the year and your house may be on the market longer now, the Buyers are still out there but taking a bit more time to do their area research on likely one of the biggest purchases of their life. Now more than ever knowing the true market value of your home is important.
Have you been thinking about moving? Wondering what your home is worth today with the shifting real estate market? Wondering if now is a good time to make a move?
We can help answer your questions, provide you with a free no-obligation Home Valuation and help you find that perfect property.