Behind the numbers: The GTA housing market in April 2020
TRREB released two market reports covering the month of April: the mid-April market update and the regular monthly Market Watch. Market conditions unfolded in a relatively uniform manner throughout April. Necessary physical distancing measures that continue to remain in place under the provincial state of emergency go hand-in-hand with the decline in resale housing market activity.
There were 2,975 sales reported through TRREB’s MLS system in April 2020, down 67 per cent on a year-over- year basis. Weekday sales remained within a relatively steady range during the month, averaging 130 sales per day.
Matching the decline in sales was the decline in new listings. In April, the number of new listings entered into the MLS system was down by 64.1 per cent year-over-year to 6,174.
Home prices, on the other hand, remained flat on a year-over-year basis. The average selling price in the Greater Toronto Area for April 2020 was $821,392 – up 0.1 per cent compared to April 2019. The number of sales remained high enough relative to listings to provide support for home prices, on average, at last year’s levels.
COVID-19 and its impact on the housing market
COVID-19 has impacted home sales and listings across the GTA. Realtors are adapting and have been able to facilitate transactions on behalf of buyers and sellers through the use of technology and innovative techniques, including virtual open houses.
Looking back at the first quarter of 2020 through the first two weeks of March, we saw a near-record pace for home sales and double-digit annual rates of price growth. However, when thinking about home prices during the COVID-19 pandemic, it is important to remember that the pace of price growth is dictated by the relationship between sales and listings.
So, while the onset of COVID-19 has understandably shifted market conditions and resulted in average selling prices coming off their March peak, there has continued to be enough active buyers relative to available listings to keep prices in line with last year’s levels.
It’s also important to note that breaking down recessions of the past, in addition to looking at their recovery phases, it does not necessarily provide the best guide on how the housing market will recover from the impact of the COVID-19 pandemic.
A key factor for the housing market recovery will be a broader reopening of the economy, which will result in an improving employment picture and a resurgence in consumer confidence. The province is currently undertaking carefully measured and monitored steps towards safely opening up some parts of the economy.
TRREB continues to encourage its member realtors to use alternative marketing strategies such as video and virtual tours wherever possible, under the current state of emergency, and to continue to follow directives and guidance being given by the government and public health agencies.
TRREB is further supporting its members by offering an improved virtual learning environment through its professional development department. Members are being educated on ways to use technology in innovative ways to conduct business virtually. They are also being provided with tools and services to meet clients’ needs.
Michael Collins is president of the Toronto Real Estate Board, a professional association that represents 54,500 professional realtor members in the Greater Toronto Area. You can contact him at email@example.com. For updates on the real estate market, visit trreb.ca.