May Results Fall Below March Peak, Buyers Pay Less Over List

By: Dana Gain

May Results Fall Below March Peak, Buyers Pay Less Over List

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Historically, May is the top performing month of the year. Not so this year.
According to Lisa Patel, President of the Toronto Regional Real Estate Board, “we saw a pullback in sales over the past two months relative to the March Peak.”
“While sales have trended off the March 2021 peak, so too have new listings. This means that people actively looking to purchase a home continue to face a lot of competition from other buyers, which results in strong upward pressure on selling prices,” said Patel.

Fewer offers have been appearing on offer day since March, and consumers continue to demonstrate less of a willingness to pay tens of thousands over asking price. We’ve even seen a few home sellers begin to price their homes much closer to the expected sale price. 

"People actively looking to purchase a home continue
to face a lot of competition from other buyers..."

All these are positive signs for buyers who have spent the past months accumulating frustration as they try to purchase homes and are consistently outbid.
This does not mean, however, that prices are dropping. We are seeing signs of stabilization, movement towards a more balanced market, but at the same time demand continues to outpace supply.
John DiMichele, CEO of the Toronto Regional Real Estate Board, expects that “people and businesses are more likely to locate in regions that have an ample supply of affordable homeownership and rental options.”

The fact that the market has started to stabilize over the past two months is evidenced in the average home prices and sale to list ratio we’re seeing in Milton and Oakville. 

Home pricing in Milton has demonstrated mixed results in the past two months.
The average price for a detached home in Milton in May was $1.34M, which was down slightly from April but still higher than March’s average of $1.32M.

Semi-detached properties have seen a moderate slide in prices. The average price for semis in May was $948K which was nearly flat relative to April, but down 4% since March 2021.
Townhomes remain relatively stable across the 3 months with very little pricing change in Milton, remaining around $860K.
Similar to Milton, Oakville saw mixed results during May.

The average price for a detached home in May was $1.86M as compared with April’s $1.89M, a decrease of just over 2%. This is the first price drop seen for Oakville detached homes since the beginning of the year.

Semi-detached properties on the other hand performed consistently well across all three months. Semi’s fetched $1.18M in Oakville during May, an average increase of $25,000 since April, and a jump of almost $60,000 since March.
Oakville townhomes showed similar values to April with an average price of $1.1M, however this sector dropped by almost 7% in average pricing since March.
What Are Consumers Paying?
In terms of price paid over asking, we see a similar story for both Oakville and Milton.
Across all home styles, the current average is 105% over list for Milton, and 103% over asking for Oakville.
This seems to indicate that consumers are continuing the trend that started in April, choosing to pay slightly less over asking price. In March, Milton fetched 107% over asking price, while Oakville saw 105% over list. This 2% shift over the past 2 months supports the idea that the market is starting to stabilize despite the ongoing demand.
It’s evident that the market is starting to see signs of calming, based on May’s results. However, if demand continues to outpace supply the expectation is that home prices will continue to rise.***
Reference: Toronto Regional Real Estate Board (TRREB)(2021). Market Watch. GTA REALTORS® Release May Stats.

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