"How's the market?" That could arguably be the question Realtors are asked the most in 2020. And for good reason too. Let's look back so we can look forward ......
At the end of 2019, I predicted a 5% increase for 2020 on the Crystal Ball Edition of the Radio Show "ON THE MARKET". The industry analysts had been predicting a fairly conservative 2% increase for the year. The basis for the higher increase (5%) was due to the fact that we had great momentum heading into 2020. September to December were strong, inventory was declining and consumer confidence had returned.
As we started off 2020, it sure looked like that 5% increase would be achievable, and maybe we would even surpass that.
Enter the Covid-19 pandemic. The train came to a sudden halt around March 15th. April and May were quite lean, after a tremendous first quarter. The market rebounded as we hit June. The pent up demand helped spike sales from June right through August. We made up a lot of ground and annual totals started to look respectable.
So what will the last four months look like, and how will the annual numbers play out as we close out 2020?
During the last four months of 2019, we saw 27,654 transactions take place. That's almost 7,000 per month as an average. Over the June to August period in 2020, we have seen pent up demand drive the average per month up to 10,168 transactions. Will we see a similar amount of transactions as we saw during the end of 2019, or will we continue to see sales spike? Let's look at both scenarios.
During the first 8 months of the year, we had 57,750 transactions. Adding in the exact same number as last year for September to December will give us a grand total of 85,404 transactions. Compared to 2019, we will be down 2.68%. Guaranteed that if you asked anyone during April or May if they'd be okay if the market declined by only 2-3% for the year, they'd say "sign me up".
Now, let's push the envelope a bit. Say the market remains active, however let's take into consideration that we may be faced with some shutdowns for a second wave. Instead of the 10,000 transactions per month, let's say we average 8500/month. That gives us 34,000 transactions for the last four months of 2020. Add that to the 57,750 we already have in the books, and you have 91,750 transactions total for 2020.
Remember that aggressive prediction of 92,000 at the beginning of the year? We'll be right there! What will make this more impressive is the fact that this potential increase will come on the heals of a 12.48% increase last year. Who would have thought that the Toronto Real Estate Market would be this resilient and survive what was in essence a two month pause?
Looking forward to seeing how the year ends up. Either way, it's been a great year for those that have made the jump into home ownership."