I never thought I’d say this, but I’ve become a sucker for those specialty shows on HGTV, Slice, History Channel, Bravo, and the like.
Never did I think that I’d spend an hour watching people fish for bluefin tuna, or perhaps mine for gold, but alas, here I am.
Then again, I absolutely despise real estate television shows, and they remain so incredibly popular! I suppose I’m averse to these shows because I happen to work in the real estate industry, so either real estate is the last thing that I want to watch when I get home, or I loathe how phony the plots, characters, and interactions on the shows are, or maybe it’s all of the above.
While watching men risk their lives to catch king crab on one such show, it dawned on me: many of these shows feature extremely cyclical industries!
In fact, while watching an episode of “Wicked Tuna,” I learned that the bluefin tuna season is only a few months long, and one of the main characters on the show is actually a full-time airplane pilot!
Many industries are cyclical, and for a long time, if felt as though real estate was that way.
The Cycle of Toronto Real Estate
Toronto is typically home to harsh winters and thus it might be assumed that it’s unreasonable to expect home-buyers to trek through snow, or visit homes when it’s dark at 5:00pm, or drive through snowstorms on weekends while open housing.
But over the last few years, the Toronto market has become far less cyclical, almost to the point where you could suggest that “seasonality” in our market is over.
When analyzing the seasonality, it makes sense to first divide properties into freehold and condos.
The freehold market is far more affected by the school calendar than the condo market, and I would probably conclude that the condo market isn’t affected by the school calendar at all.
It’s not unreasonable to conclude that “families live in homes,” and while many people across the GTA raise families in condos, looking at this the opposite way – that most houses contain families, you can see where the correlation lays.
Not only that, most freehold buyers are working around the school calendar as well. This is why the summer is often very slow in the freehold market; because school is out, families take vacations, kids are at camp, and so on.
Wondering about how to time the market? Read these posts next:
The Great Disruptor
Historically, we wouldn’t expect a freehold seller to target the summer, nor would we expect a freehold buyer to be active in those months either. But when the COVID-19 pandemic came along in early-2020, it caused the real estate market to come to a screeching halt. This was in March of 2020, and the slowdown continued into April, through May, and into June.
But by July of 2020, the market was active again, and by August, it was hotter than it had ever been. I can personally attest to the fact that August of 2020 was the single-busiest month of my career, and August is usually one of the slowest.
The sales that did not happen in the spring of 2020, due to the pandemic, took place in the summer of 2020 instead. But as we moved through 2021, 2022, and 2023, we saw that there was less cyclicality in the freehold market than in previous years. Suddenly, it wasn’t unreasonable for buyers and sellers in the single-family housing market to transact in the summer.
The real estate market is always changing. Keep reading to learn more about how often the market shifts right here.
The Real Estate Cycle is Different for Specific Property Types
As for the condominium market, I’ve long maintained that it’s completely detached from the school calendar and the movements of families.
Yes, some families live in condos, but we wouldn’t similarly conclude “most condos house families.” In fact, the opposite is actually true.
The one-bedroom condominium market has nothing to do with families, and thus it’s not correlated at all with the school year.
I would surmise that the condominium market is almost averse to seasonality, except in the rare cases of, for example, condos with exceptional terraces that show best in May or June! Oh, we’ve had a few of those over the years!
Go on, tell me that this condo could have been listed in February or November and sold just as well:
Here’s a case where the seller should be subscribing to “seasonality!”
Keep reading for more real estate insights right here:
- Is it Smart to Buy a Home when Interest Rates are High?
- To Stage or Not to Stage
- What Not to Do Before Buying a House
Peaks and Valleys are Normal
Of course, in any industry or in any market, there are always going to be peaks and valleys.
Here’s a look at the number of “New Listings” in each month over the last ten years, with the yearly-high in yellow:
For six straight years, New Listings peaked in May.
But then along came the COVID-10 pandemic, and that started to change.
August of 2020 was a bit of an outlier, but we saw New Listings peak earlier thereafter, in March of 2021 and 2022 respectively.
Interestingly enough, the other real estate statistics do not follow the exact same pattern.
If we re-run the above chart with “Sales” in each month over the last ten years, it looks like this:
From this chart, and using 2020 as an outlier, I would simply conclude that the spring is busier than the fall.
Listings and sales often peak in March, April, May, or June, but the fall market isn’t sluggish. It’s just short. And since so many people transact in the first six months of the year, it seems to reason that the last four months of the year would be slightly less frenetic.
When considering seasonality, I’ve often asked my buyer-clients the following:
Would you rather have more to choose from, but pay a higher price, or have fewer options, and spend less?
Most don’t answer directly. They say, “it depends,” or they try to re-word their answer to suit their needs.
But the point is: prices typically rise from January through June as inventory rises as well. So if you’re a buyer and you want more to choose from, ie. you want to purchase when the inventory is higher, then you might have to expect to pay a higher price.
In the end, we simply can’t predict when our “dream home” is going to come to market, nor can we predict when we’re going to get that job transfer, promotion, or positive pregnancy test – all of which might necessitate a purchase or a sale!
But the good news is: the Toronto real estate market is less cyclical than it’s ever been, as seasonality is less of a factor.
So all that’s left to do is get out there and get active! Reach out at any time by calling 416.642.2660 or emailing admin@torontorealtygroup.com. We’re always happy to chat!
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