Wow, have things ever changed in the real estate market! I wrote in April about how the market had abruptly come to a halt with the arrival of Covid and the associated lock-downs. Showings at that time had dropped 80-90% from normal levels.
The number of homes sold across Halton was down about 65% in April, 2020 from April, 2019, and about 50% in May, 2020 compared to May, 2019. The magnitude of these drops was really unprecedented.
I also wrote at that time that there was a lot of underlying demand that had been building earlier in the year, especially in better communities like Halton. Most agents and brokerages had expected this to be a strong year. And with interest rates remaining low, if the lock-down period was not too prolonged, many people expected that the market may return to strength.
Fast forward and the last few months have been a busier period than we have seen in many years. Declining sales abruptly stopped in June, when the number of homes sold in Halton were even with June, 2019.
Things then took off from there. In July, 2020, units sold were the highest for any July since July, 2015. And in August, sales were not only dramatically higher than in August, 2019, they were higher than ANY individual month since May, 2017.
This is pretty remarkable when you consider that May is traditionally the peak of the Spring market, the strongest sales period of the year, and August is traditionally a MUCH slower sales period, due to summer holidays. Average prices have also been trending higher, increasing more than 10% in August, 2020 compared to August, 2019.
So, indeed the market has returned to strength, perhaps more so than even optimists might have expected. The million-dollar question is where does the market go from here?
There are certainly lots of opinions about this question. Some say that the recent strength is simply a timing shift of purchases from the dormant early Covid period to now. And it is true that, despite this recent remarkable strength, the total number of sales for the full year is still below normal. With weakness in the economy, many businesses and consumers still struggling, and Covid cases rising again, some believe the market is due for a pull back. Others believe that the underlying demand for real estate is solid and sales will continue to be very strong in the coming months.
This of course makes planning difficult if you are a homeowner thinking of selling, or a buyer thinking of buying. No one has a crystal ball, so each person will have to make their own judgment, based on their own circumstances, time horizon, and tolerance for risk.
Only time will tell, but I think we can rest assured that even if there is a period of weakness, the underlying attractiveness of real estate in the growing GTA, combined with supply constraints, will continue to positively impact the real estate market over the medium to longer term.
Please call me at any time to discuss your real estate needs at 647-405-8057.
