January 17, 2022 | winter market
We all know that real estate is happening all the time in Toronto. Deals are done 12 months of the year. They can happen at any time of the day. But let’s not kid ourselves: There are times of the year that are far more anticipated than others. The spring market is the blockbuster show of all real estate seasons. Some of the most well-executed renovated properties come out then. Traditionally, there are far more real estate transactions in the spring than any other season. Though real estate markets can vary from year to year no matter what the season, the spring generally has far more condos and houses up for sale and more buyers out buying.
When buyers grow frustrated at not finding a property, they often hear: “Wait until the spring market, and you’ll have more options.” Next to the spring market, the fall market tends to be the next to have a rush of properties to the market from sellers to buyers. The summer market tends to be quieter. Then there’s the winter market. When I say the winter market, most Torontonians think of the Christmas market in the Distillery, but I’m not talking about that one. I’m talking about the winter real estate market.
When I mention the winter real estate market, most people scratch their heads. What is that? Like the summer market, many consider the winter real estate market to be some resting spot between the fall and spring markets. And they would be wrong.
The winter market is the most misunderstood seasonal real estate market of the four. It’s not three months of rest. If you consider winter starting officially on December 21st, then the winter market does start off very slow. The last two weeks of December can be the slowest time of the year. Buyers and seller are often focused on Holiday events. People are travelling. Many are resting.
Then comes January. In January, many sellers assume that cold weather will keep the buyers away, but after a month of Holiday events and the turn of a new year, many buyers are very ready to get out there and buy. Often they are the buyers of the fall who, for whatever reason, did not buy a property then. So, I find they are often keen to get started again after seeing a month of very limited options.
For buyers, I find the months of January and February to be two months of longing. These two first months of the year, I think, should have more attention paid to them by sellers. Winter is a time when buyers are more frustrated by the lack of inventory, and more willing, in my opinion, to buy something. Come the Spring, there will be more buyers, but there will be more competition as well, if you are a seller.
As I’ve said, this winter market can vary from year to year. Every year has its unique signature. So, what’s the winter market like in 2022? Is it different this year? Well, yes it is. It’s a more extreme version of its wintery self. What do I mean by that? Well, two things:
LOWEST OF THE LOW
First, like a typical winter market, inventory is low. And this year it’s extraordinarily low. Though we do not have any of the Toronto real estate stats for January 2022 yet, we can see the market from December 2021 to give us some idea of what to expect. In December 2021 active listings were down 59% from a year ago. In other words, in all of Toronto in December 2020, there were 7892 active listings. In December 2021, there were only 3232. That’s very low inventory compared to 2020 or any other year from the past five years. It tells us that for January 2022, inventory will very likely be extremely low. The trend will continue from last year. This is often a strong indicator that we will see even strong competition and higher prices.
AFTER THE WAVE?
This year, the Omicron variant of Covid has really taken hold in Toronto this winter. More restriction are among us. It’s far easier to catch the virus than ever before. Though the Ontario government does not currently allow open houses, private viewings are still available. Because of Omicron, I suspect many sellers may wait a month or two in the hopes that this variant will have largely passed by then. It’s not a terrible idea. It does mean, however, that we will have even less homes, I imagine, this winter market than usual. For most of those who bring a property to market in January and February, I suspect you will do quite well. I think this is often the case in most winters. Sellers often believe they need to highlight their home when it’s looking its best. A house that has a beautiful garden should be sold in the warmer months. A condo with a view of the treetops will look much better in the spring and summer and fall. And yes, those things are important. In winter, however, you often see limited inventory. And this year it’s far more amplified than usual. That may play a bigger role than a nice backyard or a pretty view.
To be clear: I don’t think listing in March is a mistake this year either. Our lack of inventory may be exacerbated in the winter of 2022, but it will stretch far into the spring of this year as well. I just believe winter real estate market can often be overlooked by sellers. This year in particular.