The real estate market really slowed down in 2018/19 following an extremely strong 2016/17. As we entered 2020, many of us working in real estate felt that there was pent up demand that could potentially drive a stronger market this year. If you look at the February 2020 numbers here, this was indeed the case, with a big increase in the number of properties sold compared to 2019, coupled with a significant decrease in the number of active listings.
This combination of low supply and high demand is of course a recipe for price increases, and you can see prices in February 2020 went up!
So – we were off to the races! But then, along came Covid 19… An unprecedented pause in normal social activity affected all aspects of the economy, and real estate was no exception.
If you look at the charts, you will see a huge drop in properties sold in April, to approximately one third of their usual level. At the same time, the low number of active listings continued, so prices were essentially flat.
In May, you can see a recovery of about half the lost ground in properties sold, as buyers began to slowly return to the market. But active listings were even lower than in April, as many sellers were reluctant to list at this time. This combination of improved demand and reduced supply led to an increase in prices in May.
We don’t have June numbers yet, but the trend of buyers returning to the market is picking up steam, and active listings are gradually returning to higher levels, albeit still below normal.
We can’t say with certainty where we go from here, but the evidence so far is that the underlying strong dynamics of the Halton real estate market, driven by the growth of the GTA and the attractiveness of the communities within Halton, bode well for a return to normalcy in sales levels.
We will have to see how prices shake out. A continued shortage in active listings could put pressure on prices to increase, while economic challenges as a result of Covid 19 could mitigate in the opposite direction.
Terry Smith is a Real Estate Sales Representative with RE/MAX Aboutowne Realty Corp. in Oakville. He can be reached at 905.338.900 or by email at tjsmith8057@gmail.com .
Source: All data from Ontario Regional Information & Technology Systems, Inc. InfoSparks © 2020 ShowingTime.
