2019 ended up with 87,825 sales which is approximately the same level as 2013, with the average price of 819,000 just under the highest level of 2017 which was at 822,000.
Here are two things you need to know from a macro level. We had the same number of sales in 2019 as 2013, yet the population has grown by 100,000 people per year, every year. The second thing is the active and new listings which is the supply of homes for sale, has been declining since August 2019, single-digit decline and has accelerated into a double-digit decline for the months of October, November, and December. Less and less supply has been coming onto the marketplace for the last half of 2019.
The reason I'm concerned for 2020 is as population continues to grow and we're seeing this acceleration of double-digit decline of supply, that could potentially lead to double digit increases in prices due to the severe shortage of supply of homes for sale. We all remember what happened in 2017 when the market was in a frenzy, things were crazy, there were double-digit increases. The government stepped in to slow down the market. That's something we're going to have to look out for in 2020; what happens to the supply of homes for sale.
I'll give you two examples. Last week, I looked at a property for a client that ended up selling with 17 offers. A colleague of mine looked at another property for their client that was sold with 12 offers. Right now, in early January 2020, supply is not looking good. But hopefully, in the next couple of weeks as we get into the spring market, supply levels will increase to accommodate the strong demand in the Greater Toronto Area.
At the end of the day, the Greater Toronto Area's problem will continue to be supply because we have population growth driven by jobs growth. The government’s mortgage stress test was a good move albeit it needs improvement for homeowners renewing their mortgages. Originally, I thought the mortgage stress test was maybe not the best thing however I'm totally on board now. I think that's a great move that they did by putting the mortgage stress test to to curb demand. They can do all these things on the demand side, but at the end of the day, we need more supply. Having more homes completed, more options available for the population and job growth is really the only way that will balance out the market and moderate the strong price appreciation. In the long term a real estate market appreciating in the 3-5% annually is sustainable and affordable.
It will be interesting to see what happens this year and moving forward if the supply levels and more homes will be built to accommodate the increase population and the strong demand in the Greater Toronto Area.
If you're looking to jump in or out of the market, please feel free to reach out. I'd be more than happy to help.
Until next time, happy investing!