Well here we are - another year has passed and the Real Estate Market continues to be a hot topic, second only it seems to that other thing that has been happening for a couple of years.
However most of the discussion and analysis centres on the GTA and/or large regional area. This makes it hard to determine exactly what is going on in our own back yard, which in reality is at the core of the interest in the market for most people. (How does knowing the average sale price of over 121,000 MLS sales in the GTA help us understand exactly what’s happening in our own neighbourhood?) Therefore here is a brief breakdown of East Gwillimbury’s MLS activity in 2021.
Overall there were 893 transactions in EG, up significantly from 634 in 2020 and 584 in 2019, which were also both records up to that point. In fact, this activity has almost doubled in the five years since 2016 (457 transactions) drastically outpacing the entire GTA’s activity growth of only 7.6% over the same period.
So why such a sharp increase? Perhaps there are two main factors driving these results; one extraordinary set of circumstances and one more naturally occurring.
The other big news story of the past couple of years is involved. East Gwillimbury is benefitting from a couple of pandemic-related trends: not only are people seeking to move away from more highly and densely populated urban areas for health reasons, but the widespread emergence of remote/online employment and education arrangements has made it possible for people to live in alternative locations without the extreme cost and inconvenience of commuting into the big city every day.
Even with the strength of the market coming out of 2019, no one would have predicted the events of the coming 2 years would result in over 50% more sales activity.
What would have been more expected is the impact that brand new residential areas throughout the Town have on the supply of homes in the resale market: more homes overall means more homes could potentially be sold. Even without the aforementioned pandemic influence, changing life circumstances (upsizing, downsizing, job changes, etc...) are the main drivers of real estate activity on a regular and ongoing basis. People that have moved into the new developments also experience these life events and therefore a certain number of these homes will enter the market.
Interestingly these 2 factors cover both sides of the fundamental supply and demand equation. The significant increase in sales activity demonstrates that demand is strong. Unfortunately though for buyers and despite the increased number of homes potentially available for sale, actual supply hasn’t kept up.
Since the beginning of 2019 there has been a consistent decline in the “Months of Inventory”, a calculation used to measure how long before all homes will sell out if sales continue at the current pace. The average during 2021 was 0.81, meaning there was generally less than a month’s supply of homes at any point throughout the year. There were only 99 new listings on average each month, and buyers were snapping them up as fast as they could hit the market.
It shouldn’t then be a surprise that the average sale price also went up sharply. At almost $1,275,000 it’s roughly 36% higher than 2020’s $938K and 60% higher than the $800K of 2019. Now of course some of this increase can be attributed to pure math: in 2021 generally higher priced detached homes (vs. semi’s and row/town homes) made up a slightly greater percentage of the total sales than in 2020 and 2019. However detached homes have always made up the vast majority of sales in EG so the difference was under 2% versus 2019 mix levels.
Simply put, East Gwillimbury’s market is very strong. Obviously it’s great for sellers. But it’s not necessarily bad for buyers. As previously noted a lot of these buyers are coming to EG from closer to the city having sold their home at market high levels also. Accordingly, even though pricing is up locally, it still represents good value to them relatively speaking.
And while the details are a topic for another day, owning a home in East Gwillimbury is still a good investment, even at these record prices. Unless you are buying today and trying to sell tomorrow, history shows that it’s highly unlikely that you will lose money.