It’s that time of the month again. Time to turn our eyes to the month end sales data from the big real estate boards. Frankly these numbers may well be meaningless until a clear trend can be established next month. With new mortgage rule changes coming into effect mid month, there was a significant chance that sales were front loaded during the month as some people no doubt rushed to beat the new rules.
With that in mind, let’s turn to the numbers and see how things are shaping up. Click on the city name to see the press release for that particular board. Many realtor boards are still frustratingly slow at releasing their month-end data. I’ve included the largest realtor boards that have released their data as of today. It’s unfortunate that at the time of posting, the boards in Edmonton, Winnipeg, Ottawa, and Montreal had not yet posted their final month end numbers.
The fine folks at VREB did their best to spin the fact that sales declined 21% over last year, choosing instead to focus on month-over-month sales numbers which always rise at this time of the year anyways:
“Victoria Real Estate Board President, Dennis Fimrite, commented that the increase in sales last month, coupled with stable prices, shows continued consumer confidence in the market. “The latest figures offer further evidence of the return to balanced market conditions…”
Integrity at its finest. And what of those stable prices? You’ll note that the press releases chooses to instead use the 6 month average. Why? I have one idea. Due to seasonality in house prices, the six month average can be highly misleading. What we need is a year-over-year comparison. Behold!
So much for ‘stable’. I guess Mr. Fimrite (or is that ‘Fibrite’?) hasn’t read his own board’s Code of Ethics which states that its members are committed to, “Absolute honesty and integrity in business dealings”. This is shameless manipulation of numbers and there’s no excuse for it.
New listings were also 11% higher than last year, a fact that Mr. Fimrite brushes off in the press release as a normal, expected rise in sales associated with the Spring buying season.
The sales to new listings ratio came in at roughly 0.4 or slightly into buyers market territory. This ratio is calculated by comparing the number of new listings with the number of sales for any one month. It is a measure of supply and demand. Though there’s no broad consensus, a reading of roughly 0.5 is balanced, 0.4 or less is a buyer’s market, and 0.6 or more is a seller’s market.
Months of inventory came in at 6.6, lower than last month’s 7.6 month total and also slightly into buyer’s market territory.
Despite the best efforts of the fine folks at the Victoria Real Estate Board, there doesn’t appear to be a bottom under their market yet. I suspect it has a ways to fall.
Crazy times continue in Vancouver, which registered a 30% jump in sales over last year. Just how much strength can be attributed to the looming mortgage rule changes will be seen in next month’s numbers, though the recent activity seems to suggest a continued strong demand for Vancouver real estate.
The sales to new listings ratio was 0.60 or slightly into seller’s market territory. Months of inventory also decreased to 3.2, well into seller’s market territory.
Prices for all housing types were up on a year over year basis by 5.4%.
It’s hard to know whether the March numbers are a signal of an extremely strong Spring buying season or the result of a rush to beat the new mortage rules. Final April numbers will give more insight.
An interesting month in Calgary as sales dipped very slightly compared to last year, but active listings tanked by 20%.
Meanwhile, average single family home prices shed another 2% while the median value was down 5% over last year’s numbers. The condo market fared worse, shedding 5% off the average and 7% off the median price in the past 12 months.
Sales to new listings ratio for the month came in at 0.56 (balanced….thanks to the drop in new listings), while months of inventory came in at 3, perhaps slightly into what might be considered a seller’s market.
If the low levels of inventory can persist, it should slow the bleeding. April will be a telling month.
It appears that the rush to beat the new mortgage rules may have been seen most prominently in Toronto, where every district saw an unusually high bounce in their sales/new listings ratio.
Total sales were very strong at 9262, a modest 11% decrease from last year’s record numbers. Sales to new listings registered at a healthy 0.6.
On the back of continued low inventory numbers, months of inventory was a paltry 1.8. This is exceptionally low. Inventory numbers are well below normal (usually 20-23K at this time of year, versus 16K currently) while sales are still very high. Kudos to Guava for the graph.
This remains the great Toronto mystery. As long as supply remains constrained, a strong floor will remain under Toronto house prices. I have little doubt that demand will experience continued weakness, but it is now the supply side that is worth watching. For now, no significant signs of stress in this market.
I debated even doing a tour through the board stats this month as I think the sales data will likely be largely skewed by the irrational rush to beat the new mortgage rules. The true test will be April and through the rest of the summer. Inventory remains largely suppressed by historic standards in many large centres. This has been an 8 month theme now. How this will play out going forward will indeed be the big question. I am certain that sales levels will experience continued weakness through most large centres, though the inventory levels will be the determinant of how the weaker demand will impact prices.