Well hello 2021, we have high hopes for you! I thought for this issue I would do a little year in review of the 2020 real estate market. I did a similar piece on Facebook on my Coffee with The Nosey Neighbour at the end of December. Please feel free to check it out at https://fb.watch/2Qb8BD8BqM/. But, self promotion aside, 2020 did prove an interesting year for the real estate market. 

The year started off with a bang. By the end of January people were saying that things were heating up to look like the spring of 2017. Do you remember that spring? It was in professional real estate speak, bonkers! In my 22 years in the market I have never seen such frenzy. Then, unlike 2017, we hit March and the lockdown. The market skidded to an abrupt halt. The only thing happening was that transactions already in progress were being completed. We sat in our houses and wondered what the future would bring; we were a city in hiding. 

However it did not take long for the market to start to make noises again. By as early as April, we were seeing new listings come to the market, and they were selling, some for over the list price. It was not uncommon for a house to have four or five offers and then be sold conditional on the buyers seeing the house, all the viewings having been virtual up until that point. As we crept out of the first lockdown, the housing market rebounded with vigour. The average house price in Toronto has jumped 17% during the worst economic crisis we have seen in decades. 

At the beginning of the pandemic Evan Siddal, head of CMHC, predicted a drop in housing prices between 9 -18%. Now this was Canada wide, not Toronto-centric, and his prediction caused quite an outcry, but his reasoning appeared sound:  a downturn in housing seemed like a normal response to the economic shock of the pandemic. But government support programs and low interest rates resulted in a different reality.

As we headed into the summer months the housing market boomed as people looked for larger spaces for their families, weighting things such as home offices, finished basements and good-sized yards as priorities. Others moved from condos to houses in order to have outdoor space. Extremely low interest rates fueled people's ability to afford more. At the same time the Toronto entry-level condo market, arguably one of the hardest hit markets in the country, saw prices falling. Students were not renting, new immigrants were not coming, Air BnB was all but banned from most buildings, and people had a fear of living in large towers of people with little or no outdoor space and long line-ups for the elevators. I think that once the vaccine has been distributed widely, we will see a change in the fortunes of this area of the market. 

Autumn saw houses selling in multiple offers and condos languishing with multiple listings in many downtown towers. This trend continued right up until the holiday season. Historically we see a slowdown in December, but this year the market continued right up until almost the end of December.  There has been some slowdown over the past couple of weeks, but predictions for the 2021 spring market are that it is going to be busy. I have read more than one report predicting a 9% increase in house prices for this year. It seems to me that the stars are aligned to see this happen, but if 2020 proved anything, it is that the future is unpredictable!