Let's catch up on the monthly data:
Over the last 5 years, the average number of condos on the market for sale in December has been 437. This past December, we had 989 available. The condo inventory significantly decreased but is still about 2x the average.
Over the last 5 years, the average number of condos on the market that sold in December has been 254. This past December we had 414 sales, demand significantly increased and was the busiest December we've ever seen!
The supply vs demand chart rose significantly as we saw both the inventory decrease and sales increase.
The December median price of a downtown condo was down from $625,000 to $611,250. Prices are down 18% from the March highs.
Significantly, the average time it took for a downtown condo to sell jumped from 24 to 35.
The final, Overall Average Price of all types of real estate in the GTA finished the year at $929,699. This is an increase of 14% over 2019.
In December, the average price of a detached home was quite flat at $1,475m. Since January 2017, home prices are up 10.4% while condos are up 32.8%.
The December statistics were incredibly odd and perhaps the perfect fitting to such a strange year. In December, the Buyer's re-appeared in droves and consumed much of the inventory overhang which is still far too high. Despite the horde of Buyer's, the inventory was just too much and prices fell again. We expected the typical December drop in inventory levels as many Seller's terminate their listings before the holidays. January's usually have even lower inventories than December and we shouldn't expect anything otherwise. If the Buyer's continue to shop, we might see prices stabilize.
The Overall Average Price graph showed the record increase due to the detached homes outside of downtown appreciating strongly. Looking at a map, it appears that the further from downtown... the more a detached home appreciated. In the 416 area, detached homes appreciated 8% while they appreciated 23% in the 905. It's a very uneven statistic though, large condos were fine but the smaller condos were the most impacted. In fact, all property types other than small condos had a good year. Why? Too many factors caused them to flood the market and raise inventory levels too high. AirBnb rules, lower rents, Covid uncertainty and negative cashflows all encouraged investors to sell.
In my opinion, a decade of investor demand for small units encouraged developers to build so many 1 bdrm units that the size of that market is making their prices vulnerable. Changes that encourage investors to sell, lead to a flood of units on the market and prices to drop. There is a supply of small new construction units committed to arrive for the next 3 years no matter what. Practically all new construction buyers for small units are investors. On the other side of the coin, we have immigration increasing. These people need places to live and often elect to rent for their first few years, this should help by adding to the demand for small units.
2020 has been a wild ride, good riddance. Expecting 2021 to be a year of recovery and stability.
Keep safe and best wishes to all of you.