Dufferin Market Analysis

We know your market and here’s where we prove it.

Below you’ll find the latest statistics on what’s going on in the Dufferin area and our take on what it means.  We do that by answering three questions for you.

Let’s get started.

Let’s review the big picture before we get into the details below. We saw the number of sales in Dufferin drop by a large amount in December and at the same time, our average sale price saw a small increase. On the supply side, we saw the number of new listings that hit the market drop by a large amount.

Here’s the latest charts for each of the three big categories (number of sales, average sale price and number of new listings), going back month by month for the last two years.

The number of sales that took place is a fundamental stat as it tells us how active the market actually is these days.  We’re particularly focused on how busy this month was compared to the last month as well as any trends we see in the number of sales that have been taking place recently.  It’s also interesting to see if this a typical month in terms of sales, which we do by looking at the chart below and seeing how it compares to the same time last year and the year before.

When we review the number of sales in Dufferin, we see that there were about 64% fewer sales in December than November. In actual number of transactions, we went from 39 sales down to 14, which means on a month over month basis, there were about 30 fewer sales in Dufferin.

The average sale price tends to fluctuate month by month and there are definitely seasonal variability.  Using the chart below, we can look for any recent market trends in terms of pricing rising or dropping for a number of months and look back at the same time last year and two years ago to see what sort of annual appreciation we’ve been seeing for sale prices.

While the level of activity in the market (i.e. the number of sales) is an important aspect, the big question is what happened to the average sale price in Dufferin in December? In November the average price was approximately $737,000 and December saw that go up by about 3% to $759,000. That works out to a difference of about $22,000 when compared to last month.

One of the best indicators of how a market feels is how long homes remain on the market.  The quicker they fly off the market, the more frantic and stressful it can be for both sides.  While it may seem like that is always positive for sellers, make no mistake, it can be stressful when sellers receive lots of attention or offers quickly.  The fear of making a mistake and pressure to decide quickly is hard on both buyers and sellers.

Here’s the latest data on how many days on market it took for homes to sell in Dufferin.

One of the clearest indicators of how it felt to be buying or selling in Dufferin in December is how long it took for a home to sell. The average days on market in Dufferin in December was 30 days, which is up 6 days from November, when it was 36 days. That means the length of time it took to sell went down by about 17%. That’s a somewhat significant change and it would have felt faster paced if you were transacting in the market.

The other statistic that gives us a good idea of how it feels to buy and sell in this month’s market is the sale to list price ratio.  This is a percentage that tells us how close to the price the sellers wanted they actually received from buyers.  If the sale to list price ratio is 100%, it means buyers paid exactly what the sellers were asking for the property.  If it’s under 100%, then the buyers negotiated a discount and if it’s over 100%, then the sellers got even more than they were asking for as a sale price.

Now that we’re clear on the meaning, here’s the average sale to list price ratio each month for the last couple of years.

If we want another example of how it felt to buy or sell in Dufferin last month, we can look at the sale to list price ratio. This is how much over (or under) the list price buyers had to pay in order to buy a home. The average sale to list price ratio in Dufferin in December was 98.4%, which is down from November when it was 98.6%. In exact percentages, there was a 0.2% drop in how much over list price sellers received, which means the market felt less competitive in December.

In order to predict what is coming next for Dufferin’s real estate market, we can look at three predictive stats, which we go into in detail below. When we look at the big picture about what these stats predict for sale prices, we’re seeing some conflicting indications of what will come next, but overall it appears the average price will see a slight drop in Dufferin in January. There, we said it!

Here’s three charts for our predictive stats, looking at the Sales to New Listing Ratio, number of Active Listings and Months of Inventory.  It is interesting to see fluctuations over the past two years but we’re particularly focused on the most recent month as that is the best predictor of what is coming next.

Let’s start with an acronym!  The Sales to New Listing Ratio (SNLR) tells us how many of the sales we saw this month were new listings in the month versus existing listings that had been on the market from previous months.  It’s considered a strong predictor of what happens in the next month because it tells us if inventory is sticking around or selling quickly.

• If the SNLR is around 50%, we have a balanced market, with sales equal to half the number of new listings coming on the market. A good amount of sales and a good amount of new options means reasonable price increases.
• Over 50% is heading towards a seller’s market, as we have sales outpacing the new inventory coming on the market. In extreme cases, we can have an SNLR of over 100%, which means we saw more sales in a month than inventory came on the market, meaning next month is very likely to see a price increase.
• Under 50% tells us that the we are headed towards a buyer’s market. The lower the SNLR, the more of a net increase in properties available the following month.  This means prices typically drop as buyers react to having lots of choices by pushing down the price they are willing to pay.

Let’s look at the latest SNLR in to see where we’ve landed and what sort of market we start next month with in Dufferin.

The first of our three predictive stats is the sales to new list ratio (or SNLR) which increased in December, going up by 1% to 50%, which is effectively a 3% increase in one month. This is not a significant enough change that it is likely to impact prices next month, however we do need to also consider what sort of market the current SNLR lands us in this month. In this case, given the SNLR of 50% we would describe Dufferin as a balanced market. In such a market, there is strong likelihood that the average price will remain flat (unchanged) in the next month. When we combine the change from last month with the current SNLR, there is a good chance that prices will remain flat next month in Dufferin.

As we turn to active listings, we need to be clear about what that means.  The number used for active listings is the number of actual, currently for sale properties at the end of the month.  This number is therefore comprised of the older listings already on the market at the start of the month, plus any new listings that didn’t sell in the month, less any older or new listings that did sell before the end of the month.

Fewer active listings tend to indicates that prices will rise as buyers battle for the properties on the market.  Let’s take a look at the latest numbers.

The second predictive stat is the number of active listings in Dufferin. We had 88 active listings on the market as of the end of December, which is approximately a 21% decrease compared to November when we had 112 listings on the market at the end of the month. On it’s own, this sort of change in the number of active listings would predict that prices would rise as the level of available options for buyers has decreased. Our second predictive stat therefore indicates that prices should rise in Dufferin in January.

Finally, let’s look at the Months of Inventory in Dufferin.

This statistic tracks how long it would take for all houses on the market in Dufferin to sell if we stopped having any new listings.  The higher the MOI, the more of a buyer’s market, the lower the MOI, the more of a seller’s market.  Somewhere between three to four months is considered a balanced market.

How is Dufferin doing in terms of months of inventory?  Remember that the lower the levels of inventory, the more likely it is that prices will rise.

Let’s look at what our current months of inventory for Dufferin predict what will happen to prices next month. The MOI as of the end of December was 6.3 months, which means that technically, the Dufferin market is a buyer’s market as of right now. In general, if the MOI is going up, it is an indicator that prices will drop as there are fewer buyers than sellers in the market. Similarly, if the MOI is going down, we typically expect prices to rise as as more buyers enter the market. Nonetheless, on its own, our current months of inventory predicts that the average price in Dufferin should drop in January.

We hope you found this review of the latest market stats helpful!  Within the Refined team we work throughout the GTA and we often partner with local agents we know and trust to make sure our clients get the best of both worlds.  If you’re considering buying or selling and want to work with people who understand your market, don’t hesitate to get in touch with us.  Otherwise, check back near the start of next month to see the latest Dufferin market analysis!