The early months of 2024 echoed previous trends, especially within the entry-level freehold segment spanning East to West to Midtown, with homes priced between 1.0 million to 1.5 million dollars. This niche experienced a remarkable influx of offers, reaching up to ten, fifteen, and twenty offers on a single listing as early as the second week of January. Was this driven by anticipation akin to a New Year’s resolution for many to secure a home? Despite the competitive nature of these bids, the initial sale numbers aligned with fair market valuations. This trend, however, shifted as the calendar moved into February, with a decrease in offer volume but an increase in sale prices (often exceeding the upper bounds of market valuations), raising concerns about the bank appraisals of such properties among recent buyers.
A significant indicator of market health, the percentage of relisted properties in Toronto notably dropped from 33% in November of the previous year to 16% in February, suggesting a market transition favouring sellers or indicating a more balanced landscape. The absorption rate for freeholds in February stood at approximately 1.3 months, highlighting the segment’s competitive nature while slightly undershooting the ten-year average for the second month of the year!
Simultaneously, the luxury market, particularly in areas like Etobicoke & Mississauga, has displayed robust demand, with properties in the two to two-and-a-half-million-dollar range attracting significant attention. However, this enthusiasm seems moderated compared to the entry-level market (the most resilient category). The ultra-luxury segment, encompassing properties valued at five million dollars and beyond, maintains a relatively balanced state.
Unexpected resilience characterizes the condominium market, maintaining stability in the average price for a condo in Toronto despite high interest rates and a slowdown in the rental market. This resilience, somewhat surprising given the record-high absorption rates observed in the final months of the previous year, is underscored by a 37% increase in condo sales year over year in January, alleviating the inventory backlog and steering the market towards a more balanced state.
Looking forward, the spring of 2024 presents a mix of expectations and strategies for buyers and sellers. For buyers, swift action is paramount, especially in the highly competitive entry-level freehold segment as mentioned above. Sellers’ approaches vary significantly based on property type, with those possessing entry-level freeholds likely to experience a smoother selling process compared to their counterparts in the condo market.
As the market navigates these evolving dynamics, neighbourhoods like the Woodbine corridor north of Danforth and West Queen West emerge as interest for first-time buyers and condo investors. Meanwhile, luxury properties, such as those in Rosedale, Summerhill, and Yorkville, continue to represent the pinnacle of high-end living, emphasizing the diverse opportunities and considerations in Toronto!
The immediate future, particularly as the market enters the spring of 2024, is shaped by a blend of strategic foresight, adaptability, and an intimate understanding of the macro and micro trends shaping Toronto’s neighbourhoods and property segments. This period requires vigilance and prompt action from buyers, while sellers can start to anticipate big potential in the coming weeks!
Advising clients during this crossover period demands a tailored approach, emphasizing the nuanced strategies necessary for navigating a market characterized by heated competition, especially among first-time buyers in the freehold segment, and evolving trends across the luxury and condominium asset classes.
As the dust settles on the early tumult of 2024, Toronto’s real estate market reveals a narrative of resilience, adaptation, and strategic foresight. The unfolding story of this market underscores a collective journey through speculative anticipation, competitive fervour, and nuanced shifts that challenge conventional wisdom. Whether it’s the surprising steadfastness of condo prices in the face of adversity, the robust demand for luxury homes amidst evolving buyer perceptions, or the strategic considerations shaping the entry-level freehold segment, each facet of Toronto’s real estate landscape contributes to a broader understanding of its current state and future potential!
Contact Fox Marin, Toronto’s downtown luxury real estate brokerage, today to learn more about the advantages of hiring a quality team!
Contact Us (We’re Nice).
—
Kori Marin is a Toronto Broker & Managing Partner at Fox Marin Associates. For high-energy real estate aficionado Kori Marin, a well-lived life is achieved by maintaining an “all-in” attitude that realizes every last ounce of one’s full potential. This mindset has driven successful results in every aspect of her life – from her corporate sales and account management experience to her international travels to her years of fitness training and leadership – and is the hallmark of the exceptional work that she does on behalf of her clients in the residential real estate sector in downtown Toronto.
