September 2020 GTA real estate review.
We sit down to talk with Steven Ho, a real estate agent at Better Homes and Gardens Real Estate, to talk about the September 2020 GTA real estate market.
Here, we’re talking more about the September 2020 GTA real estate market.
Steven Ho’s contact info:
Don’t feel like watching? Find the full transcript below!
Chris: [00:00:00] Today, I’m joined by Steven Ho from Better Homes and Gardens, a 13 year veteran of the Toronto real estate market, with a specific focus in Mississauga where he’s born and raised. Steve, how are you?
Steven: [00:00:16] I’m good. Thanks for having me on.
Chris: [00:00:19] Yeah, thank you very much for joining us. And, Steve, I wanted you to join us today to talk about the freshly released Toronto Real Estate Board numbers. We always look to them with great anticipation, and I think September was really important. So tell me what how do we make sense of what was released? I guess to start with what were the most important numbers that stood out for you?
What happened in September?
Steven: [00:00:45] Well, the numbers are a bit not seasonal. It’s very different from what we’ve seen in the past. But everything about this year hasn’t been conventional at all. So some of the numbers sales are up 42-percent from the same time last year. Prices up 14-percent, days on market down 35-percent. New listings are up 30-percent. So there are all these numbers are quite substantial. But what does it really tell us? Is it really that much more than last September? Because this year has not been a typical year?
Chris: [00:01:22] Yeah, those numbers stand out. I mean, I almost fell out of my chair when I saw the July numbers, then the August numbers and now the September numbers. And eventually, it’s got to end. Right. Or is this sustainable? And how do we really make sense? Is this bubble territory is it booming? Is it healthy? Can you share a little bit about us, about that with us?
Steven: [00:01:46] So, yeah, I’ve been keeping track of the numbers for the entire year. I’ll share a little graph I kind of been keeping track of.
Let’s review the data
Chris: [00:01:55] I’m a sucker for a graph. Steve, pull up a graph anytime!
Steven: [00:01:58] Absolutely. Because this is what really tells us kind of what happened. And with all the numbers, it’s kind of hard to digest and really make sense of what it means. So in terms of this graph, the green lines are new listings, the blue lines are the solds and the yellow line is the 7-day average of the percentage of listings sold. So this is from January 1st. And you can see we were around 97-percent sold, which is on fire. It was crazy. You know, 20-30 offers on listings. It was just crazy.
Chris: [00:02:34] Right.
Steven: [00:02:34] And then COVID happens and the lockdown happens and you can see within the month. So the end of February to the end of March here it dropped down to 11-percent of listings sold.
Chris: [00:02:46] Wow.
Steven: [00:02:48] It was a nosedive, now that makes sense because people were told to stay home and be cautious and socially responsible.
Chris: [00:02:57] Yes.
The real estate market took a nosedive in March
Steven: [00:02:58] But this is also the typical spring market time from March till pretty much the end of June. There’s a whole black void here of activity. So that’s all since then been shifted over into the summer months. So the July, August, September numbers are kind of jarring compared to previous July, August and September.
Chris: [00:03:24] Right.
Steven: [00:03:24] So, looking at the yellow bar here, we’re hovering since June, I’d say we’ve been hovering around the 60-percent of listings sold, which is a very healthy amount.
Chris: [00:03:38] Can you just interpret for us what listings to sales, what that ratio means to you or what the significance of it is? Why is it an important health metric?
Steven: [00:03:50] So that tells us the consumption rate, the supply and demand, however many listings. So supply versus the number of sales, which is the demand, is it a healthy balance or is it a lot or not a lot? That’s going to tell us where the market is and where it’s kind of going. So at the beginning of the year, the demand was way higher than the supply.
It’s all about supply and demand
Chris: [00:04:16] Right. Right.
Steven: [00:04:18] So now we’re into a more healthy range, which we’re still in a seller’s market.
Chris: [00:04:24] Right
Steven: [00:04:24] A typical market. We’re probably hovering around the 50 to 40 percent mark. So we’re still in a seller’s demand. There’s still not enough supply for the number of sales that we’re seeing.
Chris: [00:04:38] Right, right. That’s that’s interesting. And looking at this graph, Steve, you can’t help but wonder if COVID didn’t hit what the story of 2020 in real estate would have been? I mean, there would have had to be government perhaps intervention on the market intervention to slow it down because, at that 90-percent mark, that is what’s dangerous, isn’t it?
Steven: [00:05:04] Yeah, it’s unsustainable. I remember going through that time and it was just a war zone out there. And then COVID happens and it just flipped the tables on everybody. So it’s hard to say what would have happened. But what we’re seeing now is a pretty stable, steady market.
Looking towards the future
Chris: [00:05:25] Right. So then the question from here would be how do we feel about the future, I know this is a loaded question but is this sustainable from your view and what you’re experiencing in the market? I mean, we’re already into October. Are you feeling that things are continuing at this steady level?
Steven: [00:05:48] From what we’re seeing, it seems pretty stable, but it’s hard to tell. You know, we’re entering the second wave, immigration still not kind of open the doors yet, right? Interest rates are still very, very low, as you probably know.
Chris: [00:06:03] Yes.
Steven: [00:06:03] So there’s it’s hard to tell. We’re entering winter soon. Winter is coming. Christmas is around the corner. Typically, the market slows down around that time. We’re seeing a little bit of a slowdown, but it’s kind of calming a little bit. But who knows what happens, the mortgage deferrals, CERB, like what’s going to happen with government funding and subsidies, like what’s going to happen? There’s a lot that we still don’t know. So how is the market going to react to that? It’s still to be determined.
What about the condo market?
Chris: [00:06:40] Yeah, yeah, I know that. That’s the big question. There’s so much uncertainty still in the future to answer these questions. And one last thing to wrap up here before we go too much on for too long is around condominiums because I understand that not all property types are equal. And so how is how what’s the condo market looking like and how are you reading things there?
Steven: [00:07:09] So the condo market is slowed down the most, I think, for a variety of reasons. One is immigration. So that’s generally the rental market that comes in. And as you know, rental rates have dropped significantly.
Chris: [00:07:24] Yes.
Market changes are fueled by lifestyle changes
Steven: [00:07:24] The other thing is the lifestyle changes people working from home. They need a home office, maybe a little bit more space. So they’re looking at alternative options. And then the other thing is, you know, they’re kind of choosing to live in different areas.
Chris: [00:07:45] Right.
Steven: [00:07:45] And people are a little bit more cautious about overexposure with high traffic areas like elevators and common areas and things like that. So those are a couple of things about the condo market right now. But what this tells me is also there’s an opportunity. Immigration is going to come back eventually. We just don’t know when. But right now, people are shying away from that so that there’s an opportunity when others are not buying. This is where the opportunity lies.
Chris: [00:08:17] Right, right. Yeah, I think I love this quote from Warren Buffett, but be fearful when others are greedy and greedy when others are fearful. And so there’s fear in the condo market and it might be the right opportunity to pick it up. Pick up a good, good property at a reasonable price now.
Get in touch with Steven
Steven: [00:08:35] Absolutely.
Chris: [00:08:35] Yeah. Very good, Steven. Well, that was a lot of great information. And I really appreciate your candor and the time that you took to share this with us. If anybody viewing wants to get in touch with you, how do they get in touch with Mr. Steven Ho?
Steven: [00:08:55] You guys can check it out on Instagram at @mister_sauga or mistersauga.ca And yeah, you can reach me any time. I’d love to chat.
Chris: [00:09:18] Very good. Steve, thanks so much again. Really appreciate it.
Steven: [00:09:20] Thanks for having me.
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