Another month another stats update and it’s a mixed bag out there. Despite the persistent notion that prices have stalled, I still don’t see it even if you squint at the data many different ways.
Yes, months of inventory for detached houses in the core is up. The overall market months of inventory is no longer decreasing and on an annual basis it has flatlined since February. The VREB is calling it a “gradual return to a balanced market” but I think that’s getting a little ahead of the game. Months of inventory have flatlined at record low levels, and we haven’t seen any broad based cooling yet.
Meanwhile prices if anything have been picked up again similar to last year, and especially condos and townhouses are no longer lagging detached houses in price appreciation.
Looking at the annual averages, we can see that detached median prices are still increasing at about $7500/month while condos are on pace for about half that.
Of course prices are a lagging indicator. If we want to catch an earlier glimpse of whether the market is cooling, we can also look at how long it is taking for properties to sell, or the Days on Market (DOM). We can see that properties in general as well as various subcategories are selling faster now than this time last year. This should be the first measure the turn up in a cooling market.
So what’s the good news? There might be some hope on the new listings front. First of all at 1451 new listings we are up (if only barely) over the 1423 from last May. That combined with lower sales than last year means we are building inventory instead of hemorrhaging it like last year.
If we look at the sale types, it’s clear how much fewer detached homes are selling this year than last and there aren’t enough condos or townhouses left to make up the difference.
I suspect the next segment to pull back a bit will be detached houses in the westshore. Remains to be seen whether it pulls back to any kind of level that would support stabilized prices. The good news at least is that we’re on the downswing again. It could take a while, but there’s only one way market conditions are going to go for the forseeable future.