By: Peter Mulholland & Ora Ross
What Does Normal Look Like?
Tags: real estate, toronto real estate market, market update
What does normal look like?
For the home owners out there who would like to make a move yet feel they have to wait until the market gets back to ‘normal’ again, let’s take a real look at what is going on today and what 'normal' looks like.
The local real estate market has been on an upward trend since Spring of 2009, and until 2014 the average price rose about 5-6% each year. And that was pretty good.
Then along came 2015, where The average price of all home types on the Toronto Real Estate Board’s MLS went from $563,587 in 2014 to over $618,100 in 2015. A 10%+ jump in early 2016 had seller’s tripping over themselves to get their home sold at ‘record breaking prices’ often accepting firm offers right at their door. The average price on TREB’s MLS for 2016 clocked in at a whopping $723,326 and home owners were thrilled - like they won the lottery. And then came March 2017 when the average price peaked to $915,000. Is this the 'normal' seller's are still waiting on?
That was the period where everyone questioned ‘how can this sustain itself?’ and while most acknowledged it couldn’t, the frenzy continued a few weeks longer.
Between January and April 2017, the average price of a detached home in the Central Toronto area went from $1,336. to over $1,560k - in just 4 months! Some areas, including the Willowdale West and West Lansing areas witnessed price increases of over 20% in the same time period. How 'normal' was this?
The Sky Did Not Fall
Putting things into perspective, take a look at where prices were just two years ago and where they are today. Remember, 2016 was a record breaking year. All that has really happened was that the rapid increase of early 2017 was pretty much gone by June of 2017 when prices slipped back to ‘normal’. And looking at the average price chart here, things have remained pretty steady since then.
We are now in a very level market and most people just aren't used to it.
Are we waiting for it to get ‘Abnormal’ again?
The more we look at the market and study the numbers and trends, the more it appears that the market may be more ‘normal’ than we want to admit and what home sellers are really waiting (hoping) for is for the market to get abnormal again. For prices to climb that 20-30% and get back to that short spike in early 17. There is no doubt prices will get there again, however this time it may take a little longer. And that’s not a bad thing. It's normal.