August 2020 Market Review
August 2020 Review
August 2020 stepped outside of historic August performances which we have seen. This is no doubt a function of the fact that COVID-19 has shifted the Spring real estate market further down the calendar as a function to the limited social mobility that was in place over March, April and May earlier this year. The number of transactions which occurred in August 2020 were 40 per cent higher than the number of transactions that occurred in August 2019 on the Toronto Region Real Estate Board (TRREB’s) MLS. The number of new listings in August 2020 on TRREB were up by 56.8 per cent relative to that of August 2019 illustrating the shift of the traditional Spring market. The number of transactions on the TRREB MLS decreased by 2.6 per cent from July 2020 to August 2020. This is likely a function of a standard seasonal trend which we see the last two weeks of summer being very quiet. Given the prior quarantine measures in place this may have been exacerbated as families looked to spend time together with some concern of a potential second COVID-19 lock down during the Fall.
Increasing Sale Prices
When comparing August 2020 to August 2019, the year-over-year average selling price for all home types combined increased by 20 per cent. The average sale price in August 2020 was $951,404 compared to $792,134 in August 2019. Comparing August 2020 to August 2019, the average selling price increased upwards by 2.6 per cent. The sale prices of low-rise homes in the City of Toronto had a notable contribution to this price growth. It’s also exciting to note that sellers in the higher-end detached market segment in the GTA enjoyed a strong sales growth, which helped to contribute to the growth of the overall average selling price.
What trends are we seeing?
It has been noted that there has been a movement from within the City to the 905 area code as buyers are looking for more space and creating that perfect “COVID-19 backyard”. Within Toronto, TRREB’s August figures illustrate that those buyers that are staying in the heart of the City are deleveraging from high rises and looking for low rise opportunities like semi-detached and detached homes. In addition, increased demand for multi-generational homes has been noticed where separate entrances and basement apartments are serving the purpose of dual generations living in one household or supplemental income as homeowners become more cost conscious. While social mobility can be attributed to much of the increases over the summer months, it should also be noted that as more economic certainty forms and ongoing low interest rates are offered we will see continued movement for people to accomplish their lifestyle objectives.
What lies ahead for Fall 2020?
With mortgage deferrals coming to an end along with other government income supports it will be interesting to see the impact on the real estate market. There is a mindset that there could be a softening in prices later in the Fall market leading over the Winter months; this may drive some seller’s to the market earlier than otherwise expected as they try to capture buyers who are financially strong and looking to take advantage of lower interest rates. The interesting dynamic is that much of the economic pain that has been felt by COVID-19 has fallen on those that aren’t necessarily representing the bulk of buyers and sellers. The shift has occurred for those buyers and sellers has been where they work and not if they are working which has impacted their lifestyle decisions more than anything else. It has been over 100 years since we as a society have seen something like COVID-19 impact us economically, socially and psychologically; it will be interesting to see how these dynamics mix together to generate buyer and seller trends over the upcoming months.
August 2020 – Market Analysis
Monthly Percentage Change in Number of Units Sold – August 2020 – Illustration A
Month-Over-Month Average Price Percentage Change – August 2020 – Illustration B
Seasonally Adjusted Month-Over-Month Average Price Percentage Change – August 2020 – Illustration C
Monthly Percentage Change in Average Sale Price – August 2020 – Illustration D