I'd like to take a deeper dive into the seasonality of the real estate market in Toronto. As we are well into Q4 of 2024, I was curious to see what's the sales volume and price trend through out the year over a period of time. I will be using data since January 2020.
The sales value has a very obvious cycle - sales volume will continue to go up from the beginning of the year, and peak at May/June and then start to fall down till December. The cycle repeats the next year.
The average new listings coming onto the market is almost identical to the sales volume chart, where it peaks in May/June. So it means the market is generally healthy to keep a good balance of supply an demand. Except the last leg of this chart, where there's a big upward trending of listings in September 2024, but the sales volume of 2024 has come down. It may be caused by sellers are seeing interest rate is coming down, and they want to offload their investments betting that the market sentiment will be better.
Has it been taken longer for listing to sell? At the peak of the market, the average day on market is 8 days (insanely low number ) in March 2022, which is the lowest point in the chart below. But on average it takes about 30 days for a listing to sell, which in my opinion is a healthy amount of time.
And lastly, how much of the inventory is being absorbed by the market? The two peaks in 2016 and 2022, almost 75% of the listings are being sold, which is absolutely a seller's market. In September 2024, it has been a historical low at only 39% of the inventory are being sold. I have to say that's the true "winter of the real estate market" in recent memories.
Hopefully after interest rates come down more, we can catch the tailwind of that, and the historical new year sentiment will help to increase more transactions.
Comments