We’re officially halfway through 2024 now we thought we’d examine what we’ve seen so far this year and put on our predicting hats to say what’s coming in the second half of the year!
The fine folks over at the Toronto Regional Real Estate Board generate a lot of data about real estate and we’re going to take what they’ve provided and tell you what it means.
We’re only going to look at two aspects of real estate, but they are the most important ones. First, how many sales are taking place, and secondly, what’s happening with the average price for real estate!
For each, we’re going to show you the chart that shows the monthly data for the year to date, with the previous three years for comparison. It’s colourful and a handy way to see trends over time, but we’re going to take it a step further and tell you what the data tells us.
Sales galore! Well, perhaps not galore. Uh, sales somewhat!
Here’s the chart for the monthly sales on the Toronto Regional Real Estate Board’s MLS system for the year to date and the past three years. The orange bar represents the sales in each month this year (2024), with the gray bar being 2023, the yellow bar is 2022 and light blue is 2021.
Keep in mind this is the total sales for all of the GTA, both freehold homes and condo units. It’s a great representation of what’s happening in the real estate market in general, but don’t assume the same holds true for a specific neighbourhood, housing type or price point.
Here’s the key things to gather from this chart.
- 2024 started off busier than 2023, a reversal of the three year trend of fewer sales each year since 2021. January and February of this year saw more sales than the same months last year.
- As of March, however, things started looking less rosy. Instead of being busier than the previous year, we started seeing fewer sales than the previous year for each month moving forward. March, April, May and June all saw less sales per month in 2024 than in 2023. In fact, without exception, each of those months this year was the lowest number of sales in the past four years.
- Our total sales for the first half of 2024 total about 36,600. You won’t be surprised to hear that is fewer sales than the first half of 2023 (about 38,600), 2022 (about 47,000) or 2021 (about 70,000).
Not exactly the rosiest of years so far in terms of sales, which begs the question as to what’s coming next.
What’s going to happen in terms of sales in the second half of 2024?
Now that we’re clear that we’ve had a slower first half of the year than in the last three years, it’s time to look into our crystal ball and forecast what will happen in the next six months.
We pulled the sales data for the GTA for the last 10 years, going from 2014 to 2023, in order to see what has typically happened to sales in the second half of the year. Unfortunately, it does not bode well for how we’ll end the year. Here’s the key points.
- The first half of the year is almost always busier than the second half of the year. In the last 10 years, only one year, 2020, was busier in the second half than the first half. You may recall that March 2020 was the start of the COVID pandemic and real estate was definitely slow in that initial few months before coming back with a vengeance.
- On average, 54% of the year’s sales take place in the first half of the year, with 46% happening in the second half of the year. If we use that average and assume that our 36,600 sales in the first half of 2024 are 54% of the total sales we’ll see this year, it means that we’ll see about 31,600 more sales this year in the next six months. That would end us at about 68,200 sales for the year, which would actually be a little higher sales than 2023, when we saw 65,900 sales.
- If that sounds a bit too optimistic, unfortunately we are thinking the same thing. The above prediction is using the average for the past 10 years, but if we use the last three years on the assumption that it may be more accurate of the market these days, we get a different result. If we’re just talking the last three years, the first half of the year accounts for 59% of the total sales, which would mean that in the second half of 2024, we’ll have about 24,800 more sales, ending with about 61,400 sales for the year. Anything under 65,900 sales means it would be the slowest year for real estate sales in the GTA in more than 10 years.
Let’s turn from sales to what’s been happening with prices in the GTA and what’s coming next.
Prices for real estate have been all over the place lately.
Here’s the chart for the average price on the Toronto Regional Real Estate Board’s MLS system for the year to date and the past three years. The orange bar represents the average price in each month this year (2024), with the gray bar being 2023, the yellow bar is 2022 and light blue is 2021.
Keep in mind this is the overall average price for all of the GTA, both freehold homes and condo units. Even more so than with the number of sales, such general market data is susceptible to considerable variations within any individual area or housing type.
Despite the fact that the average price in the GTA for real estate is a pretty broad metric, there are some key things to gather from this chart.
- We started off 2024 with an average price of about $1.025M in the GTA, and from January to May, each month saw the average price increase. May was our high point of the year so far, with the average price hitting $1.16M. June saw that drop, at least on a technical basis. The average price went down by $3,914 in June, but it is worth noting that is the first month so far this year that it didn’t go up.
- If you look at the three previous years, you’ll notice something in the latter half of the year for both 2023 and 2022. In 2023, June was the highest average sale price, at about $1.195M. In the second half of the year, it bounced around a bit, going down a bit and then up a bit, but it didn’t reach that heigh again during the year. In fact, since then, June 2023 has remained the highest average price in the GTA. If we look back at 2022, the highest average price was in February, when it was $1.334M, and we haven’t hit that height since then.
- If we take all of that into account, it tells us that we’re not likely to see higher prices in the GTA in 2024, at least based on what we’ve seen the last couple of years.
Prices are not going to go up. Well, probably not.
Just like with the sales data, we pulled the average price information for the GTA for the last 10 years, going from 2014 to 2023, in order to see what has typically happened to prices in the second half of the year. The expression “It’s as clear as mud” comes to mind after reviewing that data. Here’s the key points.
- When we look at when prices peak each year, in five of the last 10 years, the highest average price was in the first half of the year, and in five of the years, it was in the second half of the year. Let’s say our crystal ball is a bit foggy when it comes to what will happen with the average price in the GTA during the second half of this year.
- That being said, in seven of the last 10 years, the lowest number of sales and the lowest average price took place in the same month. In 2024, our lowest sales and lowest average price was in January, so as of halfway though this year, we’re following that same trend. If we’re forecasting that we’ll see fewer sales in the second half of 2024, it seems unlikely that we’ll see our highest average price during that time.
There are of course a lot of variables that impact the average price, including interest rates and available inventory. If we see another two or three drops in prime this year, it may result in an increase in the number of buyers entering the market. While that typically means upward pressure on prices, we are currently seeing the highest amount of inventory in the market in the recorded history. With over 23,600 active listings in the GTA, supply is currently outpacing demand.
If you’re considering buying or selling, then we’d love to do this sort of analysis for the areas you’re focused on, the type of housing you’re interested in and the price point you’re considering. Get in touch with us and we’ll arrange a time to go over what’s coming next for you!