Dec. 1, 2022
Residential sales in the city slowed to 1,648 units, a year-over-year decline of 22 per cent, but 12 per cent above the 10-year average.
The pullback in sales over the past six months was not enough to erase gains from earlier in the year as year-to-date sales remain nearly 10 per cent above last year’s record high. The year-to-date sales growth has been driven by a surge in both apartment condominium and row sales.
“Easing sales have been driven mostly by declines in the detached sector of the market,” said CREB® Chief Economist Ann-Marie Lurie. “Higher lending rates are impacting purchasers buying power and limited supply choice in the lower price ranges of the detached market is likely causing many purchasers to place buying decisions on hold.”
A decline in sales was met with a pullback in new listings and inventories fell to the lowest level reported in November since 2005. The pullback in both sales and new listings kept the months of supply relatively tight at below two months. The tightest conditions are occurring in the lower-price ranges as supply growth has mostly been driven by gains in the upper-end of the market.
Despite the lower supply levels, prices have trended down from the peak reached in May of this year. Even with the adjustments that have occurred, November benchmark prices continue to remain nearly nine per cent higher than levels reported last year.
Detached sales slowed across every price range this month, contributing to the year-over-year decline of nearly 34 per cent and the year-to-date decline of five per cent. On a year-to-date basis, sales have eased for homes priced under $500,000 as the level of new listings in this price range has dropped by over 36 per cent limiting the options for purchasers looking for affordable product.
Meanwhile, new listings and supply selection did improve for higher-priced properties creating more balanced conditions in the upper-end of the market. This has different implications on price pressure in the market.
The benchmark price in November slowed to $619,700, down from the high in May of $648,500. While prices have eased over the past several months, they continue to remain nearly 11 per cent higher than levels reported last year.
The pullback in sales this month was enough to cause the year-to-date sales to ease by nearly one per cent compared to last year. Despite the recent declines, year-to-date sales remain 37 per cent above long-term averages for the city.
Easing sales this month were also met with a pullback in new listings, causing further declines in inventory levels and ensuring market conditions remained relatively tight with a month of supply of two months and a sales-to-new-listings ratio of 100 per cent.
Unlike the detached sector, the tight conditions prevented any further retraction in prices this month. In November, the benchmark price reached $562,800, slightly higher than last month and nearly 10 per cent higher than last year’s levels.
Further declines in new listings likely contributed to the slower sales activity this month as the sales-to-new-listings ratio remained high at 99 per cent. Inventory levels fell to 383 units, making it the lowest level of November inventory recorded since the 2013. This low level of inventory ensured that the months of supply remained below two months.
Despite the persistently tight market conditions, prices trended down this month reaching $358,700. While prices have eased from the June high, they are nearly 14 per cent higher than prices reported last November. The strongest price growth was reported in the North East, North and South East districts where prices have risen by over 18 per cent.
Despite a pullback in new listings this month, apartment condominium sales continued to rise, and inventories fell to the lowest November levels seen since 2013. This caused further tightening in market conditions as the sales-to-new-listings ratio pushed above 100 per cent and a months of supply dropped to two months.
Recent tightening in the market has put a pause on price adjustments for apartment condominiums. In November, prices remained relatively stable at $277,000 compared to last month. While prices have reported a year-over-year gain of nearly 10 per cent, prices are still below their previous highs set back in 2014.
REGIONAL MARKET FACTS
November sales eased mostly due to the significant pullback in detached sales. While sales this month are down over last year’s record levels, overall activity is still far stronger than long-term trends and year-to-date sales are still on pace to reach a new record high.
New listings did improve over the previous year, thanks to gains in row, semi and apartment style product. While the growth in new listings did cause November inventories to rise over last year’s low levels, inventory levels remain nearly 40 per cent below long-term trends in the area.
Despite persistently tight conditions, benchmark prices continue to trend down from the record high level reported in April of this year. Despite some adjustments, prices remained over 13 per cent higher than last year’s levels.
Further declines in November sales contributed to the six per cent year-to-date decline in sales. However, with 1,091 sales so far this year, this is still 69 per cent above long-term trends for the town.
Meanwhile, new listings have remained relatively low compared to sales, preventing a more significant shift in inventory levels. In November, inventory levels did rise above the low levels seen last year, but remained 35 per cent below longer term trends for the area.
Following significant gains reported earlier in the year, benchmark prices continue to trend down in November. However, the adjustments did not erase previous gains as the benchmark price remained over 12 per cent higher than levels reported last year.
Both sales and new listings eased in November preventing any significant change to inventory levels. While inventory levels are higher than last year, they remain 54 per cent below long-term trends for the area. Overall year-to-date sales activity has improved over last year and are 41 per cent higher than long-term trends.
As conditions have remained relatively tight this month, we saw a reversal of some of the price adjustments recorded over the previous two months. The benchmark price in November reached $549,100, a two per cent gain compared to last month, and a year-over-year gain of nearly 16 per cent.
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