February 17th 2025
I now have the January sales figures in from the Board. They are not precise. This concerns me when it comes to both number crunching and reporting. I’m not faulting anyone but the fact is that a couple of changes have occurred which skew the figures. The first, as we’ve discussed in the past, is that the industry over the past year or so has switched from average sale prices to HPI prices (Home Price Index) which zeros down on one type of sale. Compares apples to apples, but doesn’t maintain a consistency with averages from years past when that was the norm in calculations. The other is the shift in MLS systems from Matrix (Cornerstone) to PropTX. That creates a challenge first in getting all the past data transported. But also, in inconsistency of source. Under Matrix Ortis the group included Hamilton/Burlington but not Toronto. Under PropTX we now embrace Toronto, but not Hamilton/Burlington. The challenge is that both jurisdictions list and sell in Niagara. So now conceivably we are picking up new data from one source and losing some from another.
I am a mathematician at heart with an honours degree in Combinatorics and Optimization (Probability and Statistics). I know my way around numbers. So, crunching the numbers is no problem, but the reliability of data is. So, in saying that, the exact numbers are somewhat suspect. The best we can hope for is relative results and trends that emerge from one month to the next.
And when we speak of trends, one thing that realtors have been feeling lately and which the numbers now bear out is a general slowdown in sales activity in January.
The year 2024 ended unexpectedly strong as far as unit sales were concerned. Both November and December remained strong when compared with the corresponding months in the previous year, and also even compared to the rest of 2024.
December 2024 408 units sold compared to 268 in December 2023 and 580 in November 2024 compared to 374 in November 2023. The feeling based on that trend along with the substantial decline in interest rates and general interest and optimism among buyers was that January would continue to see strong sales numbers. As you can see, that didn’t happen. Across the region, total sales came in at 324. That’s down 84 units or 20.6% from December and down 47 units or 12.7% from last January. Very strange indeed. And while we can look at the uncertainty of the Canada/U.S.A. trade wars, that really was not much of a factor for most of January. The feeling is that the floodgates should burst open and sales really accelerate, but to date in February that hasn’t happened.
Now what about prices? What has happened there?
Looking at the average sale prices in January we see a similar trend to what we saw with unit sales. A strong finish to 2024 followed by a slow start in 2025.
First, let’s look at prices. Generally, we see a continued decline into the end of the year with the new year starting off about where the old year ended. December 2023 for example ended the year at $644,067, down $16,954 or 2.56% from the $661,021 recorded in November. January 2024 followed suit coming in at $650,178 just slightly above the previous year-end figure. And prices took off from there to reach a high of $744,110 in June. An increase of $93,932. This mirrored what happened in 2023 when prices in January began at $627,561, but by June had grown to $736,491. An increase of $108,930. But look what has happened to the average price in January this year. $646,689. That’s down $31,585 or 4.66% from December. In one month that’s sizeable.
So, 2024-2025 is very much out of sync compared to the previous trends. Very strong finish of year both in units sold and in average price, followed by a very soft start in both categories in January, 2025.
Why the change in trend? Very hard to say. Especially with the lowering of interest rates and the generally positive attitude on the part of the consumer. I remain very confident that we will see a strong spring market and healthy price gains in the spring. But when the fulcrum will shift is hard to say. So far February has remained relatively sluggish, but it’s still early in the year. I believe things will soon heat up both in temperature and in market strength. Stay tuned