2022 home prices are up year-over-year, but this obscures a tumultuous year in which prices hit new highs at the start, fell sharply in the middle, and have stayed flat since.
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The Market Now
After a tumultuous year, the Greater Toronto Area (GTA) saw 74,559 home sales in 2022, a 38% decline over 2021. The average price for a home in 2021 reached $1,197,481, up 8.7% over 2021. But the annual average sale price is a misleading metric and is being skewed up by the extremely high number of sales during the first quarter of 2022, even though prices have declined by over 20% since then (see 2022 Review in report below).
Looking at the most recent monthly statistics for the Greater Toronto Area (GTA) market available for December 2022, we’re seeing that even as sales numbers remain extremely low, home prices have stabilized since July in part because there are relatively few homes available for sale.
The average price for a house was $1,307,513 in December, down 22% from the most recent peak of $1,679,429 in February, and down 12% over the same month last year. The median house price in December was $1,100,000, down 26% from $1,485,000 in February, and down 17% over last year.
House sales in December were down 46% over last year while new house listings were down 25% compared to last year. The number of houses available for sale at the end of the month, or active listings, was up 179% over last year, when demand was notably high; excluding that year, the active listings number today is well below historical norms for the month of December.
The Months of Inventory (MOI) which is a measure of inventory relative to the number of sales each month (see Monthly Statistics section below for more information on this measure) was unchanged at 2.4 MOI in December, indicating tight supply conditions.
The average price for a condo fell to $721,885 in December, down 14% from the most recent peak of $840,444 in March, and down 2% over last year. The median price for a condo in December was $645,000, down from $777,000 in March and down 4% over last year.
Condo sales in December were down 52% over last year and below pre Covid-19 pandemic sales volumes for the month in 2019. New condo listings were down 19% over last year while the number of active condo listings was up 140% over last year. The MOI increased slightly to 3.3 MOI in December, indicating that supply is slightly less constrained for condos than for houses.
For detailed monthly statistics for the Toronto Area, including house, condo and regional breakdowns, see next.
House sales (low-rise freehold detached, semi-detached, townhouse, etc.) in the Greater Toronto Area (GTA) in December 2022 were down 46% over the same month last year and remain well below historical levels for the month.
New house listings in December were down 25% over last year.
The number of houses available for sale (“active listings”) was up 179% when compared to the same month last year, but still well below pre-COVID levels for the month of December. It’s worth noting that the extremely low inventory levels in the second half of 2021 were due to a surge in demand as the market accelerated towards the peak in February 2022.
The Months of Inventory ratio (MOI) looks at the number of homes available for sale in a given month divided by the number of homes that sold in that month. It answers the following question: If no more homes came on the market for sale, how long would it take for all the existing homes on the market to sell given the current level of demand?
The higher the MOI, the cooler the market is. A balanced market (a market where prices are neither rising nor falling) is one where MOI is between four to six months. The lower the MOI, the more rapidly we would expect prices to rise.
While the current level of MOI gives us clues into how competitive the market is on-the-ground today, the direction it is moving in also gives us some clues into where the market may be heading.
The MOI for houses remained relatively unchanged at 2.4 MOI in December.
The share of houses selling for more than the owner’s asking price dipped slightly to 27% in December.
The average price for a house in December was $1,307,513 in December 2022, well below the peak of $1,679,429 reached in February and down 12% when compared to the same month last year.
The median house price in December was $1,100,000, down 17% over last year, and below the peak of $1,485,000 reached in February.
The median is calculated by ordering all the sale prices in a given month and then selecting the price that is in the midpoint of that list such that half of all home sales were above that price and half are below that price. Economists often prefer the median price over the average because it is less sensitive to big increases in the sale of high-end or low-end homes in a given month which can skew the average price.
Condo (condominiums, including condo apartments, condo townhouses, etc.) sales in the Toronto area in December 2022 were down 52% over last year and well below pre-COVID sales volumes for the month of December.
New condo listings were down 19% in December over last year and in line with historical listing volumes for the month of December.
The number of condos available for sale at the end of the month, or active listings, was up 140% over last year.
Condo inventory levels increased slightly to 3.3 MOI in December.
The share of condos selling for over the asking price decreased to 17% in December.
The average price for a condo in December was $721,885, down from the peak of $840,444 in March, and down 2% over last year. The median price for a condo in December was $645,000, down 2% over last year, and down from the March peak of $777,000.
Average prices were down over last year across all five regions with Peel and Durham seeing the biggest decline in prices. Sales were down significantly across all regions and inventory levels were well ahead of last year’s level.
Average condo prices were down over last year in Durham, Peel and Halton down, with Toronto and York seeing little change. Sales were down significantly across all regions and inventory levels were well ahead of last year’s level.
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The Move Smartly monthly report is powered by Realosophy Realty, an innovative residential real estate brokerage in Toronto. A leader in real estate analytics, Realosophy educates consumers at Realosophy.com and MoveSmartly.com and helps clients make better decisions when buying and selling a home.
John Pasalis is President of Realosophy Realty. A specialist in real estate data analysis, John’s research focuses on unlocking micro trends in the Greater Toronto Area real estate market. His research has been utilized by the Bank of Canada, the Canadian Mortgage and Housing Corporation (CMHC) and the International Monetary Fund (IMF).