5 Things to Know: September 2024 Real Estate Stats & News

#1: Some Good Real Estate News

There was a LOT of good news announced for buyers, sellers and homeowners in September:

• Interest Rates: September saw a third consecutive decline in the Bank of Canada’s overnight rate, helping ease the burden for homeowners with variable mortgages and giving hope to buyers and sellers. Economists seem to agree that we’ll likely see another reduction on October 25th, with some predicting a 0.5% drop in October and others predicting two consecutive 0.25% drops in October and December. Either way, we hope to reach 3.75% for the winter/early spring market. Remember: the overnight rate is what lenders use to set the actual interest rates consumers pay. Current mortgage rates range from 4.2-4.5%, which equals about $500/month in mortgage payment for every $100,000 of mortgage.
• Longer mortgage amortization for first-timers and pre-construction buyers: As of December 15th, 2024, first-time buyers with insured mortgages (in other words, downpayments of less than 20%) will be able to amortize their mortgages over 30 years instead of 25, bringing their monthly payments down (but increasing the total interest paid). The longer amortization will apply to all pre-construction sales, too.
• Increase to insured mortgage price cap: As of December 15th, 2024, Buyers with less than 20% down will now be able to purchase a home up to $1.5 million (vs the previous $1 million).

If you want to read all the details about the mortgage changes, check out this blog: Help is On the Way

#2: There’s a LOT for Sale Right Now

Unsurprisingly, the slower market of the last few months has created a glut of inventory. While the volume of sales has been trending higher in the last few months, these inventory stats are worth noting:

• New Listings: There were 18,089 new listings in September (10.5% higher than Sept 2023 and 37% higher than Sept 2022). Buyers have a lot to choose from.
• Active Listings: 25,612 properties were listed for sale in the GTA in September 2024. For perspective, 51,828 homes sold in the first nine months of 2024.
• In the City of Toronto: Overall, Toronto buyers hold the negotiating power. We have more than 5.5 months of inventory (meaning it would take us that long to sell all the properties listed for sale at current sales rates). But….
• All Inventory is Not Created Equal: Detached houses are still a popular choice among buyers, with less than 3 months of inventory in the city of Toronto – meaning it’s a relatively balanced market for houses. But we have more than 7 months of condo inventory – presumably the result of interest-rate-sensitive first-timers and investors who really struggled this year.

#3: It’s (Probably) a Condo Buying Opportunity

There’s so much to say about Toronto’s condo apartment market:

• Condo Prices Are Down, But Also Up: Compared to September 2023, the average price of a condo decreased by 3.5% in Toronto and by 4.1% in the GTA. But…and this is important….the average price of a condo in Toronto is actually UP by 3.7% when compared to August 2024. Interestingly, the average condo sold in September sold for 98% of the asking price.
• Dismal Pre-construction sales: Sales of pre-construction condos and launches of new condo projects are at a 27-year low, which foretells good news for condo owners in the future. Despite today’s gloomy condo stats, we continue to have a housing shortage in Toronto. To keep up with our growing city, we need 40,000 new homes built each year – and we’ll be a looooong way from that goal for at least the next five years. If the laws of supply and demand hold, this could be great news if you own a condo.
• Listing Inventory: As mentioned above, there’s a lot of condo inventory for sale right now. Toronto sellers are notoriously sticky with their prices, meaning they often prefer to take their properties off the market rather than lower their prices. While we’re facing unprecedented market dynamics, I wouldn’t be surprised to see this happen in the condo market. It will depend on whether today’s condo sellers are willing, motivated or desperate to sell in 2024. Do they want to sell in 2024? Or do they need to sell in 2024? (Related: Are You Willing, Motivated or Desperate to Sell? )

I think the next 6-12 months will represent a great buying opportunity for condos in Toronto, with the ideal combination of lower interest rates, greater demand from first-timers/investors and more stable prices.

#4: Things Are Still Moving Slowly

In September 2024, it took, on average, 43 days to sell a property. That’s a big increase from the 30 days it took last September, but it’s a one-day improvement over August.

In Toronto, we measure Days on Market in 2 ways:

• How many days a listing was active on the MLS before it sold
• How many days a property was active on the MLS before it sold (which accounts for properties that are listed multiple times before selling)

Related: You can read an in-depth article about Days on Market here.

If your property is listed for sale right now, it’s important to have realistic expectations about how long it will take. Listen to the market and adjust your price and expectations accordingly.

While the ‘official’ price statistic for September 2024 vs September 2023 shows that, on average, prices decreased by 1%, the story gets a lot more interesting – and relevant – when we compare September vs. August prices. For the City of Toronto:

We predict prices will continue to increase over the coming months as interest rates continue to come down, the mortgage changes come into effect (December 15), and buyers gain confidence.

Remember: We only know when the ‘bottom’ of the market is reached when it’s in our rearview mirror. If you’re waiting to buy, time your purchase carefully – if you wait too long, you’ll face fewer choices, more bidding wars, and higher prices.