July 19, 2021 | summer market
I’m often asked, “When is the best time to buy or sell real estate in Toronto?” or “What season are you able to get the best bang for your buck?” Luckily, in a city as big as Toronto, you can buy or sell real estate almost any time of the year. The taps are not ever fully turned off even though there are busier and quieter times of the year. Of course, not all seasons roll out the same way every year with such consistency. Take this summer. It is very different from last summer. This summer has a quiet, balanced market. Last summer was fast-paced with accelerating price gains.
Summer is traditionally quieter with fewer transactions that any other season. People are not as keen on buying real estate as they are indulging in summer weather. There are fewer Toronto properties to buy, but also fewer buyers. This summer is particularly quiet, especially in June and early July. Prices are not falling, but the rate of price growth has slowed down in most neighbourhoods after a heated winter and spring. This summer some units are taking a little longer to sell. Homes don’t always sell in a bidding war. Of course, if you have a property that requires minimal amount of work in a good neighbourhood, you will likely still be competing with other buyers for that property.
Last summer may not seem very different on paper to this summer. July 2020 only had slightly more transactions than July 2021. It’s not remarkable until you put it into context with the rest of the year. July 2021 was the only month this year that has less transactions that its equivalent month in 2020. In other words, each month between January to June of 2021 had many more transactions than their corresponding months from January to June of 2020.
In March of 2020 when Covid first began to make an impact on Toronto at the end of the month, there were 2,752 transactions in Toronto. In March of 2021, there were 5,186 transaction -almost twice as much. April was no different. In April of 2020 there were 1,030 transactions. In April of 2021, there were 4,686 – almost five times more transactions in April 2021 than April 2020. For April 2020 and most of May 2020, most people were convinced it was not a very good idea to be buying or selling anything. We didn’t know enough about how Covid was spread or where the economy may be going, and we were experiencing our first lockdown. When the Covid cases started going down in the summer of 2020, Toronto began to open up again. The spring market that didn’t happen in 2020 was pushed into the summer of 2020. So, the summer of 2020 was closer to how the spring of 2020 would have been if Covid hadn’t arrived.
In the summer of 2021, we are following a very robust spring market – one of the busiest we’ve seen. Now, we have been in a lockdown for most of the year. There have been some form of restrictions in Toronto that really didn’t seem to change the buying and selling of real estate. By the end of the spring of 2021, most Torontonians were under serious lockdown fatigue. Unlike the previous summer, where we wanted to get back to normal life by buying real estate, this summer we want to get back to the things we can do in the summer after our long time indoors – not real estate. That means seeing friends and family or planning a vacation, even if it’s not too far away. There was a reason why it was so hard to book a rental cottage this year. People wanted to do summer things again!
We had a busy summer and fall in 2020. We had a busy winter, and the spring of 2021 was busy too. Higher prices and many more transactions. In fact, we really didn’t have much of a seasonal pause for almost a year. That is very unusual.
In the summer of 2020, buying and selling real estate represented a need to move ahead with your life. We just came through a time when it was difficult to sell real estate in Toronto. Buying and selling real estate felt closer to normal life after our first lockdown. We also had our first taste of remote work, and many of us needed to make some real estate adjustments to reflect our new reality and much more time at home. In 2021, those who needed to change their living arrangements because of the pandemic, had done so. If someone needed more space and could buy something larger, they had already done it before this summer. That’s why 2020 real estate prices in Toronto were moving so quickly in the summer of 2020, and why things have largely stabilized so far this summer.
I think this summer pause will be a good rest from a fast-paced market with so many transactions. Real estate will still go on in Toronto this summer, but at a slow gallup instead of a sprint. I suspect we may be into a busier market again in the fall. We’ll likely have a traditional fall, a busy market taking flight on cue after Labour Day. More listings and more buyers back at it.
Buyers, you may be able to take advantage of the lull this summer to take part in a more tame market with some properties. I’m noticing residential leases are really taking off right now. So, we may see some renewed investor interest in the Fall as investment properties begin to show better profits. My recent experience with a one bedroom condo apartments in Toronto showed me that lease prices were already already up about $200 since May. From $2200/month for a good sized one bedroom loft with parking up to about $2400/month.