NOVEMBER 15, 2012
October resale numbers are out. In general, the sales trend picked up in most metros relative to September, but the improvement was not quite as sharp as reported.
If we go back to September, it was unusual in that it was bordered on each end by weekends, meaning there were only 20 weekdays in the month, a fact pointed out by most real estate boards when it was revealed that sales had plunged relative to previous years. And it was a very fair point, and one that I acknowledged in a couple articles. October repaid the favor by having an unusually high 23 sales days in the month, a fact that wasn't nearly as heavily touted as the lack of sales days in September.
So to be fair, I thought I'd present a quick look at the past 10 years of sales data for Canada and each metro region, but I've adjusted each year to show the sales per week day, as this is ultimately the most valid comparison. Note that the sales data is not adjusted for population growth. All things equal, sales should have an upwards bias as population grows. Details below:
Some very general thoughts:
Vancouver: Sales rebounded nicely from the abysmal readings in September, but all things are relative. High inventory and sales that, while better than last month, are still nearly a third below decade averages does not bode well for near-term price stability. I'll be discussing these latest trends when I'm in the city later this month.
Calgary: Still by far the best looking metro. Little on the supply/demand front to indicate any near-term price weakness. It's definitely been the most volatile metro for sales historically. Interesting to see that 2012 came in only in line with decade averages, in spite of the eye-popping y/y increase in sales we've been accustomed to reading about.
Toronto: Same old story- Weakness in the condo market, strength in the single detached market, a trend I suspect will continue. Overall, sales are trending lower, and an 18% y/y decline in sales coupled with a 17% y/y jump in MLS listings shouldn't be shrugged off. There's a message there.
Ottawa: The weakness in this market is misleading from the chart, which shows sales coming in at decade averages (-8% y/y). The real story is in the inventory build in the city, where October new listings once again came in at decade highs (a trend now intact for 8 straight months) and the sales/new listing ratio once again came in at decade lows. Ottawa continues to closely guard their MLS inventory numbers (shamefully, the only real estate cartel to do so), but I still suspect the weakness in this market will go mainstream in early 2013 unless current trends reverse.
Montreal: Still absolutely ugly and no one is discussing it yet. The sales chart speaks for itself, but coupled with current MLS inventory that is at by far the highest level ever for the month, this is a market in serious trouble. Expect the issues in this market to also go mainstream in early 2013.