Have They Run Out of Words to Describe the Real Estate Market?

In a recent post, we talked about real estate headline fatigue, or the recent regular barrage of “record real estate” headlines. Not that we’re complaining! The great headlines are the sign of a healthy residential real estate market in Markham and across the GTA.

However, the recent release of August’s home sales figures by the Toronto Real Estate Board (TREB) might spell a new chapter in headline writing – one where journalists can no longer find words to describe the incredible pace of growth.

While the TREB Market Watch report was delivered under the rather timid banner of “Strong Sales & Price Growth”, the news media headlines tried harder, but failed none-the-less to express the magnitude of August’s numbers.

Why? Well, like we said, who can keep coming up with new ways to truly express what’s happening in the market? Even CBC’s “Toronto-area home sales, average prices soar in August” falls short.

What Happened in Local Real Estate in August?

According to TREB, its members sold a record-setting 9,813 residential properties in August in the Toronto area, which includes the regions of York, Peel, Halton and Durham as well as Simcoe County.

The record number represents a 23.5% increase in home sales versus August of 2015. It’s worth noting that August, 2016, had 2 more working days than August, 2015. But even after making an adjustment for the extra days, the number of sales in the GTA was up about 13% in August.

Setting a new record for the number of sales, which is what sent journalists and bloggers scrambling to find new ways to describe it, isn’t necessarily the most amazing real estate statistic from the TREB report. In contrast to the massive increase in sales, the number of real estate listings dropped. Real estate listings are the number of homes on the market. TREB reports two different listings numbers:

New Listings are the number of new homes that came onto the market during the month.

Active Listings are the number of homes on the market on the last day of the month.

For August, TREB reported the following for the entire GTA:

  • New Listings of 12,409 versus 12,628 for August 2015 – a drop of about 1.2%
  • Active Listings of 9,949 versus 15,997 for August 2015 – a staggering drop of 37.8%

As we’ve mentioned in this blog before, the relatively low supply of homes on the market is one of the underlying factors behind the record-setting home prices we’ve enjoyed over the past several years. Of course, a steadily-low mortgage interest rate is the major driver of the record selling prices.

The phenomenon of higher sales from fewer homes on the market is putting even more upward pressure on prices. Home prices in the GTA set yet another record in August, up 17.7% versus a year ago, to $710,410 for all types of homes. Detached home prices enjoyed an even higher sales increase of 21.5%, to $964,002.

Markham Numbers Just as Healthy

As always, Markham is no slouch when it comes to the performance of its real estate market. Here’s a look at the Markham figures for all the statistics we discussed above:

  • 2% – the increase in the number of sales of homes of all types
  • 9% – the decrease in New Listings versus a year ago
  • 6% – the decrease in Active Listings versus a year ago
  • 0% – the increase in the average price, to $943,398, of all homes sold in Markham, versus a year ago
  • 0% – the increase in the average prices of detached homes, to $1,389,991, versus a year ago. This is almost 2 percentage points higher than the same figure for all of TREB!

“The conditions for underlying strong demand for housing ownership remained in place, including a relatively strong regional economy, growth in average earnings and low borrowing costs”, said Larry Cerqua, President of the Toronto Real Estate Board in reference to the August numbers.

This means homeowners and buyers in Markham, Richmond Hill, Stouffville, all of York Region and the GTA, continue to enjoy the healthiest real estate market in recent memory.