A moody February in Toronto real estate market after busy start to 2024

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The Toronto-area real estate market lost some steam in February after a burst of activity at the start of 2024 relieved a bit of pent-up demand.

Bucking the traditional seasonal trend, sales in the Greater Toronto Area dipped in February from January on a seasonally adjusted basis, according to the Toronto Regional Real Estate Board, while new listings were flat.

The market has been patchy in recent weeks as some properties sell with multiple offers and others fail to draw a bid.

Still, the early weeks of the year – including a few bidding frenzies – have motivated some homeowners to start prepping their properties for sale in the next few weeks.

Some homeowners who listed houses for sale but didn’t find a buyer in the moribund fall market are also preparing to try again, agents say.

Elli Davis, real estate agent with Sotheby’s International Realty Canada, says the city’s very easy winter has already put homeowners into a more positive frame of mind – and spring is around the corner.

“A lot of people had pulled back in the fall,” she says.

Sales picked up in the final week of last year after a slump that lasted from September through the first half of December.

Ms. Davis sold five properties in the final days of 2023.

“It was very interesting because they were all listings that had been on for a little while.”

Some of that momentum carried into January as buyers speculated that the market had hit a low point and sales and prices might rally if the Bank of Canada lowers interest rates later this year.

In February, sales in the GTA jumped 17.9 per cent compared with February, 2023. New listings increased 33.5 per cent last month compared with the same month a year earlier.

Adjusting for the extra day in February owing to the leap year, sales rose 12.3 per cent last month compared with February, 2023, according to TRREB.

The average price in the GTA edged up 1.1 per cent in February from a year earlier to stand at $1,108,720 in February.

TRREB chief market analyst Jason Mercer predicts that lower interest rates in the second half of the year will boost demand for home ownership.

As more homeowners think about selling, Ms. Davis prefers to list properties when there is little competition from other sellers in the neighbourhood.

In the week leading up to March break for Ontario schools, many agents hold back listings because families often leave town. But Ms. Davis points out that people who are actively looking do much of their searching online.

“I’m of the opinion, if I have a good listing, I put it out there – March break or not.”

At the end of February she listed a traditional four-bedroom house near Bathurst Street and Eglinton Avenue West in the Cedarvale neighbourhood with an asking price of $1.895-million.

Ms. Davis set a deadline for reviewing offers at 5 Menin Rd. because there were no rival properties for sale. Four buyers submitted bids and the house sold firm for $2.3-million.

“There seems to be a real pent-up demand for Cedarvale,” she says.

Other listings are taking more time to sell, she adds.

Ms. Davis listed condo units at Granite Place on St. Clair Avenue West and Renaissance Plaza in Yorkville that have not sold.

Both buildings appeal to empty nesters, she says, but the units need renovations, and many downsizers looking for a large condo are not keen to take on a project.

“They’re willing to pay more money but they want turn-key,” she says.

Ms. Davis says buyers are quick to notice properties that have an eye-catching asking price.

“Within one day I know that the price is very realistic,” she says.

“If its priced right for what it is and where it is,” it will sell, she says. “If it’s priced too high it just sits there.”

Andre Kutyan, broker with Harvey Kalles Real Estate Ltd., is hearing from homeowners who are contemplating a sale, but the inventory is more of a stream rather than a flood.

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“I am seeing a lot of stuff in the pipeline.”

Mr. Kutyan says many potential sellers are aware that buyers are trying to purchase now because they believe prices will climb if interest rates fall. Many buyers are lining up a mortgage with a variable rate or a short fixed term of one year or so.

Many figure that locking in a price now is more important than waiting for a lower interest rate, he says.

“They’ve only got one shot at buying the home at the right price.”

Another cohort of owners is waiting for the Bank of Canada to begin trimming interest rates because they figure prices will climb, Mr. Kutyan says. That group is pondering listing in June or July.

“A lot of sellers are very optimistic – maybe overly optimistic – that it’s going to be very good when rates drop.”

In Mr. Kutyan’s opinion, a slight discount in the central bank’s key rate is unlikely to have a large impact on buyers.

Mr. Kutyan says the timing of a listing depends on the segment: Empty nesters and downsizers who are looking for a condo unit are not likely to be swayed by the timing of events in the school year.

Mr. Kutyan received some calls from potential sellers soon after private schools sent out their acceptance letters in late February. That often leads to movement in upscale neighbourhoods such as Forest Hill and Lawrence Park.

Mr. Kutyan says parents often decide to move if their child gets into the school of their choice. Many shuttle their kids to and from school, and sitting in traffic can take up a lot of time.

“If you can get within one major intersection of your school, it can make it a lot easier.”

High tuitions may also have an impact on household budgets – especially in families with more than one child.

“These are all considerations for people,” he says. “It might affect where they’re going – both geographically and financially.”

Mr. Kutyan was preparing to list a house at 87A Bedford Park Ave. before the Ontario March break begins. The four-bedroom house in the family-friendly neighbourhood has an asking price of $3.385-million.

Many families will leave town after classes end on Friday, he notes, with public schools on holiday for one week and private schools for two.

Soon after those vacations wrap up, the Easter holiday begins with Good Friday on March 29.

With holidays close together, many homeowners will list in early April.

The photographers, stagers, painters and other suppliers are booking their services for that window, he adds.

“Everyone is gearing up for April,” Mr. Kutyan says.