The market was bound to go up due to pent-up demand before COVID-19.
Even with the current pandemic, real estate sales have risen from May 2020 to June 2020, which is a relief for the Toronto real estate industry. According to the Toronto Regional Estate State Board’s MLS®, sales have jumped up 89% since May and only decreased 1.4% year-over-year. Keep reading to learn benchmark house sales prices, types of homes that were selling in June and more.
Spring is known to be the “hot” selling season.
It’s no surprise that houses started to sell like hot cakes in Toronto once the economy began to open back up. With COVID bans lasting from March to May, buyers were getting antsy to purchase their new home in June. During the start of COVID, there became a low inventory of listings in the GTA, actually almost record low at 14,000 active listings. The only recent time listings have seen a level this low was in 2016 when active listings hit rock-bottom at 12,32. Luckily the listing supply has started to increase as COVID bans lift.
Low supply and steady demand led to bidding wars and significant increases in home prices.
Year-over-year districts within the 416 area code saw an increase of 60% in the average price of a home, and 50% surges in 905 areas. Averages prices soared to 95% between January and June compared to 2019 prices in the same period.
What types of homes were selling the most in June?
There was a remarkable improvement in sales in detached and townhomes in Toronto and across the GTA. These homes saw an increase in sales from June 2019 to June 2020. People still want to live in the GTA, and the rise in prices hasn’t stopped all home buyers from moving here. The average and benchmark selling prices increased year-over-year for all main house styles. Detached (+14.3%) and semi-detached (+22%) markets took the prize for the best annual price rate growth. The average selling price of these two homes’ styles overtook the growth of the MLS ® Home Price Index. The HPI tracks house prices over time and takes into account the types of homes sold. Experts are forecasting a surge in the higher-end market segments with a trend pointing towards semi-detached and detached.
Why the market didn’t burst – even with COVID-19
Many homebuyers were lined up to move into homes or start looking for new homes in February and early March before the Coronavirus hit. Many new home buyers were pre-approved for mortgages or sold their homes earlier in the year and needed a place to move into COVID or not. On the reverse, some families or homeowners needed to downsize and move out of their homes for economic reasons.
The market is likely to continue climbing this summer; however, no one really knows.
If a second wave of the Coronavirus hits and the economy shuts down again, real estate could be affected again, just like its hit in March of 2020. Only time will tell. Luckily, Realtors® adapted and integrated technology into their sales process to show homebuyers what their future home will look like.
Comment below and let us know where you think the market is heading. Are we on point with guessing that detached and semi-detached homes will continue to be in demand?