14 Jan My predictions for 2020 real estate!
Happy New Year all!
Before we look ahead, we should look back at what happened in 2019. Most of you have already seen the stats, but those can be more confusing than Donald Trump’s hairstyle, so I’ll give you my “easily understandable” summary of what happened in 2019:
The year started out much the way it ended in 2018 – very slowly. Listings were down, prices were flat, the decent inventory that came to market sold quickly but unfortunately, there wasn’t enough of that to go around. The stress test and foreign buyers tax were taking effect and morale was fairly low. Many real estate agents were spotted selling lemonade on weekends to pay the fees on their leased BMWs.
Things changed as we entered the second half of the year. Interest rates were dropping and the market started to show signs of growth. All the people who were nervously sitting on the sidelines worried the market was going to drop lower realized it wasn’t going to happen, and the Toronto market was too resilient for a big correction. Investors took advantage of the flat prices, low-interest rates, and high rental demand to find some great value in the middle summer months. It didn’t take long and the market was up and running, ending with a fantastic finish to 2019. Prices and sales volume were up for the last 6 consecutive months of the year and the demand on the $500k-$600k price point was incredible. Some lower-priced condos in November were receiving 15+ offers on offer night as buyers were taking the shirt off their backs to get their foot on the Toronto home ownership ladder.
So what does this mean for 2020?!
Being one of the top 50,000 real estate agents in the GTA I am obviously very qualified to give my predictions, so here’s what I believe will happen in 2020. Plain and simple, it’s going to be a great year. We finished 2019 with an average sale price in the high $800s, which is still below our 2017 high of almost $920k. The price is not nearly as important as the supply stats. If you’ve been reading this newsletter for a while you’ll know that I believe above everything, it all comes down to supply and demand and we still have a big supply problem here in the GTA. Only 7400 properties are available in the GTA right now. In an ideal world, we’d have closer to 15,000 props available so if the supply doesn’t drastically increase, prices will rise.
My prediction for 2020 is an increased average sale price of 4.7%. Did I just make up that number? Yes, I did – but I am so confident in the numbers that If I am off by more than 2% at the end of next year, I will send 100 different $20 gift cards to readers of my newsletter (which you can subscribe to here at the bottom of the page, if you aren’t already!).
Thanks for reading!