Residential Market Commentary - Christmas in December
As COVID-19 vaccines began rolling out, Canadians racked up another record-setting month for home sales.
Canadian Real Estate Association numbers for December show a year-over-year increase in sales activity of 47.2%. That is a new record for the month and the biggest y-o-y increase in 11 years, by a margin of 12,000 units.
Month-over-month sales jumped 7.2% from November to December, another all-time record.
A related but more esoteric statistic shows seasonally adjusted activity was running at an annualized pace of 714,516 units in December 2020 – the first time on record that monthly sales at seasonally adjusted annual rates have ever topped the 700,000 mark.
CREA’s preferred method of tracking home prices, the Aggregate Composite MLS Home Price Index, rose by 1.5% m-o-m in December and was up 13% y-o-y – the biggest gain since June 2017.
The national average price for a home hit a record of $607,280 in December, up 17.1% from a year ago. With the heavy weight markets of Toronto and Vancouver factored out, the national average price drops by about $130,000 to $477,000
For all of 2020 more than 551,000 homes changed hands – a new record. It is a 12.6% increase over 2019 and a 2.6% increase over the previous record, set in 2016.
The thing to watch in 2021 is the sales-to-new-listings ratio. New listings rose just 3.4% in December. The ratio now stands at 77.4%, one of the highest readings ever. The long term average is 54%.