June 2018 charts: don't get fooled

Here's your Toronto real estate market report for June. Don't get fooled by some of the positive year-over-year (YoY) stats you're seeing. 

Here's what I saw with TREB's June market stats. As always, these are just selected highlights. The full set of market charts is available on SlideShare.

1) Freehold sales are up!

Here's something I wrote a couple of months ago in my April stats roundup:

And this is something I wrote last month in the May stats roundup:

And the below is what I was talking about. June freehold sales are up 6.5% year over year! Great news! But as I said above, context is important and that's why I use 7 years of info in my charts. June sales are actually down 25% from the 7 year averages. Sales are slow right now. I had knee surgery in January. One month later I was running faster than in January, but I was still a lot slower than normal.

2) Headline writers are wack

Here are some headlines from the release of the June stats:

Toronto Star: Toronto home prices finally inch up in June

Globe & Mail: Toronto housing market begins to stabilize after months-long slump

Globe & Mail: Toronto housing market scores ‘snappy turnaround’ after months-long slump

Okay, the papers often use "Toronto" to mean the GTA and not the City of Toronto, which is a pet peeve of mine. Not too hard to write GTA instead of Toronto in those headlines. But take a look at these two charts and tell me when prices started to inch up, or began to stabilize. 

In the last 12 months, detached houses have accounted for 26% of 416 sales, and condo apartments were 55%. So between these two charts we're talking 81% of the market. If you ask me, detached prices have been stable since last August and have been inching up since January. Condos stabilized last June and have been inching up in price since August. THIS IS NOT NEW!

3) I'm not worried about Freehold MOI anymore

Last month I was concerned about the sharp rise in freehold months of inventory (MOI) from 2.0 in April to 2.5 in May, as I was seeing active listings continue to climb during the month of June. Another quick rise to something like 2.9 would signal the potential for falling prices, as the sharp rise from March to July last year brought. However, as you see below, the figure fell to 2.2 so I'm not on "heightened alert" anymore.

 

What's in store for July?

Again, we're into the part of the year of 2017 that was really rough, so YoY comparisons will look nice even through in the broader scheme of things sales are poor. Prices, as I just showed above, have been stable for a long time and have been inching back up for months now. Despite another Bank of Canada rate hike today, this may not effect fixed rates too much as this increase was widely expected so the financial institutions have largely baked that into their rates. So I don't think this will panic the market and things will continue at their slow and cautious pace through the summer, I expect.

 

As always, you will find the full set of market charts on SlideShare. I tried something new this month with my indicator arrows. Instead of using green for up and red for down, I've used blue for getting colder and red for getting hotter (grey is fairly neutral).

 

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About Scott Ingram CPA, CA, MBA

Would you like to make better-informed real estate decisions? I believe knowledge is power. For that reason, I invest a lot of time researching and analyzing data and trends in the Toronto real estate market. My Chartered Accountant (CPA, CA) side also compels me to dig a lot deeper into the numbers on individual properties my clients are interested in. The better the information you have, the better decisions you will make. To discuss how I can assist you with your real estate needs, call me or reach out via the Contact Me section of my homepage.

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Scott Ingram

Scott Ingram

REALTOR®
CENTURY 21 Regal Realty Inc., Brokerage*
Contact Me