The record hot weather in August was mirrored in the real estate market. There were 9813 homes sold in the GTA last month, an all time record for the month of August, and over 23% higher than last year. At the same time, new listings in August were slightly lower than last year, and this resulted in continued extremely low inventory of homes for sale. Inventory normally rises during the seasonally slower summer months, but actually fell in August to near the lowest point of the year.
The dearth of homes for sale, together with continuing ultra-low mortgage rates, have been driving prices upward at a manic pace all year. While prices in August did not increase from July, they were almost 18% higher than last August. Detached home prices were 21.5% higher than last year, and even condo apartments were 9.8% higher. The fall market is now underway and, if the pattern continues, we should see a very significant jump in prices over the next 2-3 months.
Clearly the present trend cannot be sustained indefinitely, if only because prices are rising much more quickly than incomes, stretching affordability limits ever more tightly. It remains to be seen whether the end will be a kind and gentle one, the ever-elusive ‘soft landing’, or a more jarring one brought on by changes in the increasingly volatile world outside our borders.