Toronto’s July 2021 market was tighter than a year ago. This time last year, we were emerging from the lockdown and sales were picking up. Fast forward to July 2021 and sales volumes are lower as new listings declined across all the different property types. Our sense is that sellers are putting off selling their properties in the fall market by which time borders will be more open plus they will have an opportunity to enjoy options afforded by stage 3 of the reopening.
With supply down, average prices were slightly higher than July 2020 but with lower prices than the 2021 spring frenzy.
Speaking of average price, a loyal reader asked whether the average prices reported in our newsletter is the mean or the median. To which, I answered that all of our averages use the mean price (which is calculated by adding up all the prices and then dividing by how many properties were sold).
His question came about because by using the mean, averages can be distorted by exceptionally high or low prices. Whereas, the median price (which is the middle value of properties sold in the month) can be a better measure of average price changes because it does not factor in extreme values.
The following charts compare mean and median prices for the detached and condo apartment market. (You will need to download images)
Chart 1 – 2021 Toronto Detached Property Prices (Mean vs Median)
The above chart shows that mean prices for Toronto’s detached properties are always higher than the median. This makes intuitive sense as the most expensive detached property in Toronto sold for over $15M in 2021, whereas the lease expensive detached property sold for $450K.
Chart 2 – 2021 Toronto Condo Apartment Prices (Mean vs Median)
Toronto’s mean condo prices are also higher than the median. Much like the detached market, the mean will skew higher than the median since there are outliers such as the $11.6M condo that sold in Rosedale while the lease expensive condo sold for $150K.
Chart 3 – Mean Less Median Price Differential
Chart 1 & 2 establishes that Toronto’s mean prices are always higher than the median. To get a better understanding to what extent mean prices are skewed by outliers, we can look at the differential between the mean and median prices.
Chart 3 above shows that the average difference is $69K and $313K for condo and detached respectively. When the average difference is similar to the actual difference (ie. February detached market), we know that there were fewer outliers; whereas when the actual difference is much higher than the average differential (ie, March and June detached market), we know that there were outliers that significantly increased the mean price.
In summary, Toronto’s mean prices are always higher than median prices. When the difference between the mean and median price is in line with the average, the mean price can be trusted more as a central tendency.
Next month we will analyze the difference in price changes between mean and median. (Some of you who enjoy numbers will look forward to that. For those that don’t, feel free to see what Shen is up to and enjoy the articles and quotes below J).
Shen Shoots the Breeze
Now that we are in stage 3 of reopening, travel is on the uptick. My brother lives in the U.S. and it’s been over 18 months since we last saw his family. My parents missed seeing them (mostly the grandchildren!) and decided to head south to visit.
I wanted to share with you my parents’ experience in case you also are considering air travel to the US. Note, this may change by the time you are travelling so check with the airline, the latest on testing requirements, etc…
For context, my parents are Canadian citizens, residents of Ontario and both are double-vaccinated and were travelling on a direct flight to the US via Air Canada.
Before your departure:
If applicable, print out your proof of vaccination
You will need to provide a negative Covid19 test at least 3 days before your departure. If you are heading to the US, you only need to do a rapid antigen test (~$40) which is cheaper and results are provided faster than the more comprehensive PCR test (~$200). Although we know friends travelled to the US with a negative antigen test, my parents still opted to do the PCR – they just didn’t want to risk it and were getting different opinions on what would be acceptable.
Print out and fill the attestation form
Day of departure:
Be at the airport earlier than you would have prior to the pandemic. Nexus travellers should be processed faster; however, remember that for most Air Canada flights to the US, you are clearing US immigration prior to your flight and if you don’t have the correct paperwork it may mean missing your flight.
Return back to Canada:
Book a PCR test 72 hours before your flight. Most US cities offer free PCR testing.
Download the ArriveCAN app onto your phone and provide the needed information.
Again, arrive earlier than you would have prior to the pandemic. Have your ArriveCan information uploaded ready to show the airport personnel.
Upon arrival to Canadian airport:
My parents arrived into Pearson direct from the US. They were told to scan a QR code and fill in the requisite information and from there they would need to take another Covid test. While they were expecting to get tested again, about 45 minutes later they were told they didn’t need to take the test since both were vaccinated so they hustled to the immigration area (it seems like testing upon arrival is no longer a requirement if you’re fully vaccinated). It took them 2 hours to get processed. Neither of them have Nexus nor did they check in any luggage.
Don’t expect to exit the airport quickly even if you have Nexus. Some flights do not allow passengers to disembark right away and make them stay on the aircraft at the gate for up to a couple of hours as the terminal is full processing other passengers. If you happen to arrive when there are a number of other international flights, you may be in for a long wait. I read that it may help to arrive first thing in the morning, ie, red-eye flight and now would probably not be the best time to travel with young children.
Although our stay-at-home orders are over, it may be better to stay at home and travel locally than to tackle border crossings.