Wake Me Up When September Ends
The Market Watch stats have come in for the GTA for the month of September, and like the titular Green Day song it’s an emotional roller coaster, and ultimately a tear jerker. The stats are insane, difficult to comprehend and to my eyes deeply concerning. Allow me to present the meatiest morsels:
Active listings DOWN 49.4% vs September of last year.
New listings DOWN 34% vs September of last year.
Average sale price UP 18.3% vs September of last year (which was a record month then).
New RECORD monthly sale price of $1,136,280, which obliterated the previous record month of $1,097,565 set in March of this year.
There are many, many more stats I could share, but they all beat the same dead horse and last I checked horse tartare still isn’t a thing in North America.
The dark irony here is that these stats have been released directly after the election and election cycle, when all the parties made a bunch of claims of varying outlandishness about how they would “fix” the housing crisis without ever getting anywhere near the real solution, which is (and always will be) to increase SUPPLY. Call me cynical, but I don’t see that happening anywhere in the near or distant future.
I guess a bit more dead horse beating is called for…
The notion of supply needs to be kept in mind when people get (understandably) exasperated over the rapid and never ending raising of prices. And that falls at the feet of the government.
Let me put it much more bluntly. The government is to blame (over a long time period and over many administrations) for the current prices and dearth of inventory.
It’s not the fault of “greedy” sellers, who are simply taking advantage of the rules in place. Don’t hate the playah, hate the game (or something like that). And everybody loves it when they are selling but hate it when they are buying.
It’s not the fault of “loose cannon” buyers, who in many cases are simply desperate to get into the market while they can still afford anything, or before their baby is born.
Finally, it’s not the fault of “corrupt” real estate agents, who again are merely operating within the parameters of the day to day reality they face. It is my belief that the majority of real estate agents are strongly in favour of a much more balanced market, and are genuinely concerned by the current state of affairs. Just ask any agent who works with buyers (you know, the other 50% of the equation) how they feel right now. Ask them how much they are drinking right now as well.
I think the quoted blurb from the Toronto Real Estate Board president in the September report profoundly gets to the heart of the matter..
“The lack of housing supply and choice has reached a critical juncture. Bandaid policies to artificially suppress demand have not been effective. This is not an issue that can be solved by one level of government alone. There needs to be collaboration federally, provincially, and locally on a solution.”
So, barring a dramatic reversal of fortune, what does this all mean moving forward? Here’s what I think:
- Home ownership in the GTA will be attainable by only the most affluent of citizens.
- The quest for home ownership will continue to aggressively push people further and further outside of the core.
- Parents and children purchasing and living together will become much more common.
- The dream of affordable home ownership for all (or most), is dead.
- The hardest of compromises (busy main streets, proximity to crack dens) will be required to purchase.
- Renting will become the preferred and dominant option of habitation.
Apologies for this not being the most cheerful post heading into a holiday weekend, but it’s nothing that copious amounts of turkey, gravy and wine can’t wash away for a bit. Gobble gobble.