SUPPLY LEVELS IMPROVING FOR HIGH-PRICED HOMES
Sales gains for homes priced above $600,000 offset declines at the lower end of the market, resulting in October sales that were similar to last year. The 2,174 sales in October increased over September and stood 24 percent above long-term trends for the month.
“Housing demand has stayed relatively strong in our market as we move into the fourth quarter, with October sales rising over last month,” said Ann-Marie Lurie, Chief Economist at CREB®. “However, activity would likely have been stronger if more supply choices existed for lower-priced homes. Supply levels in our market are improving relative to the ultra-low levels experienced last year, but much of the gains have been driven by higher-priced units for each property type. This results in conditions far more balanced in the upper end of the market versus the seller’s market conditions in the lower to mid-price ranges of each property type.”
The gains in new listings relative to sales over the past six months have supported inventory gains in the city. As of October, 4,966 units were available, a significant improvement over the near-record low of 3,205 units reported last October. While inventories are starting to reach levels more consistent with long-term trends, the inventory composition has changed as nearly half of all the residential inventory is now priced above $600,000.
Adjustments in supply are helping move the market away from the tight market conditions experienced in the spring. However, conditions remain relatively tight, with 2.3 months of supply and a 67 percent sales-to-new listings ratio, and the months of supply do vary significantly by price range and property type. For example, detached homes priced below $700,000 are reporting less than two months of supply, while homes priced over $1,000,000 are reporting over three months of supply. This is likely resulting in different price pressures depending on price range and property type.
Overall, the total residential benchmark price was $592,500 in October, over four percent higher than last October and on a year-to-date basis, averaging over eight percent higher than last year’s levels. The unadjusted benchmark prices did ease slightly over last month due to seasonal factors, as seasonally adjusted prices remained relatively stable in October compared to September.
DETACHED
Home sales rose to 1,071 in October, a gain over last month and nearly 10 percent higher than last year. While new listings were higher than last year, they slowed over last month, causing the sales-to-new listings ratio to rise to 69 percent and preventing any further monthly gain in inventory levels. With 2,199 units available, the months of supply remained near two months, a gain over the under two months reported last year at this time, but slightly lower than last month.
The unadjusted detached benchmark price was $753,900 in October, slightly lower than last month but still eight percent higher than levels reported last October. Additional supply choices in the higher price ranges have taken some of the pressure off home prices. However, the recent monthly pullbacks are more related to seasonal conditions, as seasonally adjusted prices have remained relatively stable over the past three months.
SEMI-DETACHED
Sales in October rose over last month and were over six percent higher than levels reported last year at this time, contributing to the year-to-date growth of over three percent. New listings for semi-detached homes have also been on the rise, supporting some steady gains in inventory levels. The shift in supply compared to demand has helped push the market toward more balanced conditions, especially for higher-priced properties. However, with only two months of supply, the overall conditions still favour the seller.
The unadjusted benchmark price was $677,000 in October, similar to last month and over eight percent higher than last year. Year-to-date prices have averaged an over 11 percent gain.
