Fall Market Conditions: Buyers Choice
In a typical year for Toronto Real Estate, the late fall months are considered a good time to purchase. Purchasing prior to the end of year has proven beneficial, as Sellers have historically commanded higher prices in the New Year. Inventory to start the New Year is traditionally lower and doesn’t meet the level of Buyers demand, meaning Sellers are able to get a premium over the previous year, even though only a few months have passed.
At this time last year, I felt less certain that the New Year would offer typical returns. Buyers’ affordability seemed limited given the unprecedented interest rate hikes we had just experienced. However, the market saw strong price appreciation beginning as early as February, with the average price increasing by double digits from fall to spring. It has since retracted those gains. Active listings in October have jumped to levels we haven’t seen in October since 2012, and the SNLR (Sales to New Listing Ratio) for October was 32% solidifying that we are in a Buyers market to wrap up 2023. The SNLR monthly measurement has only recorded 3 lower readings since 1996: Jan 2009, January 1996, and September 2023.
In less than 6 months, Months of inventory (MOI) has built to 4.2 a huge change from the low of 1.3 seen in May of this year. Buyers remain on the sidelines as Sales for 2023 are likely to come in below 2022 sales of 75,000, a low we hadn’t seen since 2008.
This leaves would-be Buyers to decide whether Buying prior to the year end will follow typical market patterns. It’s unknown whether Sellers will outpace Buyers to the market in 2023 and keep inventory levels high enough to maintain a buyers market and avoid a price run up typical of years past.
