Trend Spotlight: Decoding the GTA Real Estate Market (Nov-24)

The latest issue of Trend Spotlight: Decoding the GTA Real Estate Market (Nov-24) is now available, offering unbiased and trusted insights to help you navigate the complex GTA real estate landscape. This month's edition provides in-depth analysis and expert commentary, empowering readers to make informed decisions with confidence.

Reflection chart

The Reflection Chart offers a detailed visual analysis of market dynamics by categorizing conditions into seven distinct phases: Strong Seller, Moderate Seller, Weak Seller, Neutral, Weak Buyer, Moderate Buyer, and Strong Buyer markets. It tracks fluctuations in sales momentum, average prices, and inventory levels over time, illustrating shifts between seller- and buyer-favorable conditions

From June to September 2024, the housing market strongly favored buyers, as indicated by the green zones on the Reflection Chart. This period was marked by the Bank of Canada's delayed action on interest rates, which created uncertainty and caused many buyers to delay their purchases in anticipation of potential rate cuts. Simultaneously, an increase in inventory provided buyers with more options and reduced competition, resulting in minimal price growth and greater negotiating power. The combination of these factors led to a prolonged phase of buyer-friendly conditions.

In October 2024, the market experienced a sudden shift toward a Moderate Seller Market, highlighted by increased buyer activity. Pent-up demand, driven by buyers re-entering the market after months of hesitation, and typical seasonal sales momentum contributed to this change. Rising buyer competition led to price appreciation and a reduction in inventory, giving sellers more leverage.

By November 2024, the market settled into neutral conditions, as indicated by the yellow zone on the Reflection Chart. Seasonal cooling resulted in declines in sales, prices, and new listings.

Trend Settlers

November 2024's market trends showcase a nuanced balance, shaped by seasonal patterns and longer-term recovery dynamics. Monthly sales decreased by 11.5% compared to October 2024, closely aligning with the historical average monthly drop of 11.4% (as highlighted in the "% Average Monthly Change (25+ years) vs % MOM Change 2024" graph). However, year-over-year (YOY) sales surged by an impressive 40.1%, signaling strong market recovery and robust demand compared to November 2023.

Similarly, average house prices dipped by 2.5% month-over-month, reflecting cautious buyer behavior, but recorded a 2.6% YOY increase, demonstrating sustained long-term price growth. Inventory dynamics further highlight market resilience, with a 10.9% month-over-month drop reflecting seasonal cooling, while a 30.2% YOY increase in inventory was significantly offset by the 40.1% surge in sales, ensuring tighter supply-demand balance. New listings also followed this dual trend, dropping by 25.7% month-over-month but rising 6.6% YOY. These dynamics underline a transitioning market where seasonal cooling is balanced by strengthened YOY demand and improved inventory levels, showcasing the market's overall stability and adaptability

November 20 years Reflection Chart

A 20-year Reflection Chart focused on November months reveals that November historically aligns with buyer markets for house sales. However, only two exceptions—November 2017 and November 2024—registered as neutral markets. This unique shift could indicate a positive trend for enhanced sales activity in 2005.

·????? Buyer markets in November reflect reduced competition among buyers and higher inventory levels.

·????? The neutral momentum observed in Nov-2024 suggests growing equilibrium in the market, hinting at potential sales growth moving into 2025.

12 months - House Sales vs Average Price

The chart 12-month house sale vs average price shows that house sales peaked in May 2024 and gradually declined with slight rebounds in September and October, while average house prices peaked in June 2024 before declining sharply through August and stabilizing slightly in the fall. Despite monthly fluctuations, the trend lines indicate a gradual upward trajectory for both sales and prices over the year, suggesting a generally positive real estate market influenced by seasonal and economic factors.

20 years Nov Sales Vs Average Price

The chart "Nov Sales vs Average Price" highlights November house sales and average prices from 2004 to 2024. House sales show fluctuations, with major dips during the 2008-2009 financial crisis and the 2020 pandemic, followed by recoveries, but the overall trend remains flat, indicating no long-term growth in November sales. In contrast, average house prices display a consistent upward trend, reflecting long-term market appreciation despite temporary declines during economic downturns. These trends underline the stability and growth in property values over two decades, even as November sales remain relatively stagnant.

% Average monthly Change (+25 years) vs % MOM Change 2024

The chart titled "% Average Monthly Change vs. % MoM Change for 2024" compares the current month's data with the 25-year historical average. MoM sales from October to November 2024 fell by 11.5%, this aligns closely with the 25-year average of an 11.4% seasonal decline, indicating the drop is typical for this time of year and not market-driven. Conversely, the MoM increase from September to October 2024 was 33.5%, significantly exceeding the historical average of 5.7%, suggesting a market-specific anomaly. This chart offers a clear and reliable framework for understanding real estate dynamics by distinguishing seasonal patterns from market influences.

Conclusion:

The November 2024 real estate market demonstrates a transitional phase with notable year-over-year growth yet seasonal cooling. Sales rose 40.1% from November 2023, indicating market recovery and robust buyer demand, while average prices increased by 2.6% YoY, reflecting long-term appreciation. However, month-over-month data showed an 11.5% decline in sales and a 2.5% dip in prices, consistent with seasonal slowdowns. The Reflection Chart highlights a market shift from strong seller conditions earlier in 2024 to neutral or buyer-leaning dynamics, supported by a 30.2% YoY rise in inventory. This evolution suggests a more balanced market heading into 2025, presenting opportunities for buyers and challenges for sellers.

As the market transitions, stakeholders should strategically prepare for 2025 trends. Buyers can leverage increased inventory and price softening in early 2025 for favorable deals. Sellers need to adopt competitive pricing and enhance property appeal in a more balanced environment. Investors should focus on undervalued properties and areas with growth potential driven by economic recovery and infrastructure development. Monitoring key factors like inventory levels, interest rates, and government policies will be essential for informed decision-making in a dynamic real estate landscape.

Forecast:

• Short-Term Outlook: December 2024 is expected to see continued seasonal moderation in both sales and prices.
• Early 2025 Trends: An uptick in sales is anticipated by February 2025 as market activity picks up, supported by improving buyer sentiment.

Bismillah Realty identifies this period as an opportune time for buyers and sellers to evaluate their strategies, particularly as inventory balances against demand pressures.