GTA February 2023 Real Estate Market Update

The real estate market in February saw interesting trends, particularly with the Bank of Canada announcing a pause in foreseeable interest rate hikes, resulting in bidding wars for homes priced under $1,000,000. However, other homes and condos continued to take longer to sell.  The lack of inventory persisted, resulting in buyers competing for homes and driving up prices compared to January 2023.  While some communities saw slower price growth, particularly in the luxury home market, others experienced rising prices.  
 

February Supply and Demand

 The supply of homes available for sale continued to be low in February.  In February 2023 new listings were 40.9% more than they were in February 2022 but were up 8.9% compared to January 2023.   However, in many regions listing inventory continued to be at historically low levels.  The lack of inventory has resulted in buyers once again competing for homes priced under $1,000,000 resulting in multiple offers and bidding wars on these homes.  As a result, we saw that the average price increased by 5.5% compared to January 2023 but was still 17.9% lower compared to the historical record of February 2023.
 

February Average Sale Price

 As mentioned earlier, the lower inventory combined with more buyers coming out of the sidelines has resulted in rising prices compared to January 2023.  The average sale price is as a result up by 5.5% compared to January 2023 but down 17.9% compared to the historical record set in February 2022.
 
However, some communities and neighbbourhoods are seeing slower price growth, as sellers are being cautious about overpricing their homes while we are still in a somewhat volatile market.  The higher-end market, in particular, is seeing less price growth, as luxury homes tend to take longer to sell and are more sensitive to economic uncertainty. to January 2022.


 

Outlook

Looking forward, the real estate market in the coming months remains uncertain, with higher demand and inventory shortages likely to persist, making it challenging for first-time homebuyers to enter the market.  
 

Great Opportunity for Buyers

 February was an interesting month for real estate as after about 8 months we started to see multiple offers once again on starter homes. I project that with the lower inventories that the multiple-offer trend for starter homes will continue through the spring market. Further, if inflation continues to drop we will see more buyers come back into the market as buyer confidence will continue to increase.
 
We have only recently started to see price decreases have started to flatten and are starting to see multiple offers on starter homes (townhomes and semi-detached homes). I caution buyers that are waiting to see if the market will “crash”.  Trying to time the market can be dangerous as by the time buyers realize that the market is not crashing it will be too late.
 
My advice to buyers and particularly first-time buyers is to buy what they can manage and continue to save and build equity rather than paying a landlord’s mortgage.  If you are a first-time buyer or an investor it is a good time to get more active in looking for that perfect property.  
 

Conclusion

Overall, the real estate market in February was marked by low inventory, increased demand, and rising prices. It is expected that these trends will continue through the spring market.  Many economists and experts are projecting that the real estate market will bounce back in the last six months of 2023. It is my opinion that once the market bounces back we will return to the aggressive bidding wars once again as the housing supply remains low and buyer demand has continued to increase although more recently buyers have been sitting on the sidelines.
 
Buy and sell your home or recreational property with Sylvia Smith.  She specializes in residential and recreational real estate within the Greater Toronto Area, Parry Sound, and Muskoka.  Whether you are a first-time buyer, an investor or you are looking for a cottage property, she provides a seamless experience and is committed to making clients’ real estate dreams come true while protecting their interests and providing integrity and client service.  If you have any questions or are thinking of buying or selling, don’t hesitate to reach out to Sylvia Smith.