The spring market is upon us and Toronto is back to the white hot market of 2017.
A quick glance at Toronto’s February results shows double digit price increases for all types of housing.
Last month, I provided an overview of the Toronto Real Estate Board’s forecast for 2020. They estimated 10% price growth this year based on insufficient supply as immigration is expected to fuel Greater Toronto Area’s population by more than 100,000 people per year for the next several years.
To get a better sense of the strength of the market and what is to come, we can look at 2 leading indicators: the sales to new listing ratio (SNLR) and months of inventory (MOI).
The SNLR is the ratio between the number of homes sold and the number of new listings entering the market. The sales-to-listings ratio is ~50% during a balanced market where prices generally increase 3% to 5%. A higher ratio implies a seller’s market and conversely, a lower ratio implies a buyer’s market.
MOI is a measure of how long it would take for all the existing homes on the market would last assuming: i) no more listings are added, and ii) homes sell at the same rate as the most recent month.
The following tables outline the 2017-2020 trends for these 2 leading indicators.
These results confirm that there is tighter supply of freehold and condo dwellings so far in 2020 compared to 2018-2019 resulting in a seller’s market as evidenced by the rising SNLR.
Amidst the back drop of the impact of the coronavirus, roller coaster stock market and lower interest rates, these metrics are pointing to increased prices.
Shen Shoots The Breeze
“What is important is seldom urgent and what is urgent is seldom important.” – Dwight D. Eisenhower. About 5 years ago, I stumbled across this article: The Eisenhower Decision Matrix: How to Distinguish Between Urgent and Important Tasks and Make Real Progress in Your Life. This article helped me categorize my To Do lists into 4 quadrants: 1. Urgent & Important, 2. Important But Not Urgent, 3. Urgent But Not Important and 4. Not Urgent & Not Important. While I don’t agree with all of the author’s examples of what goes into each category, I do agree with him that we should spend more of our time doing things that are categorized as #2. I probably spend too much time on #3 activities and I regret to say, also #4. Revamping our website http://daveandshen.com/ (important but not urgent) was on my list in summer 2019 but was completed last month as many #3 and #4 type tasks took over. We finally completed it and hope you go and check it out! It was the most amazing feeling to be able to cross that one off my list.
Speaking of lists, I’m always interested in how people organize their lives – especially organized people. I’m a total nerd for making lists, completing them and crossing them off. When I joined the staff at Grace Toronto Church, I was introduced to a new software/app called Workflowy. I love this program: it’s web-based, comes also as an app, I can share my lists with other people and best of all digitally check off completed items. What are some apps or programs you use to keep yourself organized?
We have many clients who are downsizing for various reasons. CBC aired a documentary last week: The Art of Downsizing. Three seniors share their story and challenges of downsizing. I could feel how overwhelming the task of downsizing is – in terms of its physical requirements and more difficult is the emotional connections I have to belongings. One of the subjects shared that he spent almost $500,000 in storage for the many items he inherited. Yikes! I find that old files and electronics are culprits. We have a lot of old fines but not enough to make it economical for us to hire a paper shredding service regularly. I recently found this place – they can pick up by weight or use the drop n watch service. Our local boy scouts club also collects e-waste as part of their fundraising efforts. It was such a relief when we got rid of our clunky 1-million pound TV, keyboards, phones and cords.