Looks like many homebuyers are making up for staying on the sidelines last year: number of sales has increased by 15% since December and the average sales price for January is up by over 34K month-over-month. Year-over-year, the average sales price is up by 1% with 37% more sales this January vs a year ago. Meanwhile, number of new listings in January was 4% lower than same time last year.
These are clear indications of more buyers being ready to make a purchase in this first quarter vs last quarter of 2023.
WHEN IS “SPRING MARKET?
“While “Fall Market” activity typically peaks in October, “Spring Market” depends on many factors, such as interest rates, policy changes, and even the severity and longevity of Canadian winter. Over the last several years we’ve seen peaks in the spring market in different months as affected by the pandemic and most notably in 2022 when the market peaked in February and declined shortly afterwards due to the rapid interest rates increases. Last year has seen a much slower start to the market activity resulting in the number of sales as well as the average sales price peaking in June. With this January already surpassing sales by 37% from same time last year, it’s possible that this year’s “spring market” could peak a lot sooner than in 2023.
HIGH DEMAND IN DURHAM REGION
Durham Region continues to be in high demand for the Greater Toronto Area homebuyers: the has the fastest absorption rate in the GTA with 1.6 months of inventory, meaning if no new listings come to market, based on January sales, it would take 1.6 months to sell all existing listings. By comparison, City of Toronto’s months of inventory in January was 2.7, Brampton 2.3. The fastest absorption rate is in Ajax, Whitby, and Clarington- all at 1.5 months of inventory. Clarington is noteworthy here as it’s typical for properties to move faster in more urban areas such as Ajax and Whiby, and Clarington comprises of a good mix of urban and rural properties, which typically have a slower absorption rate.
BUYER’S OR SELLER’S MARKET?
These terms tend to be thrown quite loosely but based on the market indicators of the absorption rate as well as number of sales to new listings ratio, the signs certainly point to a strong and faster moving market trajectory this spring than the more balanced conditions we have experienced in the second half of 2023. However, it’s important to remember is that the market is highly location and property type specific. Activity is different in freehold townhouses where demand is significantly greater than there is for multi-acre agricultural properties. It’s also important to remember that attractive marketing strategy can create a seller’s market for a specific property regardless of overall conditions.