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2021: The Year in Review
Posted January 21st, 2022 under market updates.
Although COVID-19 had an initial impact on the market in 2020, by 2021 it appeared to have become more of a background worry for many buyers. As far as buying statistics are concerned, it seems that buyers simply ignored the pandemic in 2021.
Early in the year, sellers came out of hiding, and active listings increased for the first four months of 2021.
However, from April onward, active listings dropped month after month, falling from around 1000 to an all-time low of only 120 homes listed at the end of December. (This is for all of Brampton! A city of 600,000 people.)
This is truly an unprecedentedly low number, especially when you consider that 16,200 listings came on the market in 2021, an increase of 12.5% over 2020 (when 14,400 listings came on the market).
What happened? Sales increased even more than new listings. In 2021, we had 12,100 sales, an increase of more than 22% compared to 2020 (when we had 9,900 sales).
With sales increasing so much faster than listings, the sales-to-listings ratio never dropped below 63% during the year. (In a &r;quo;normal” year, a ratio of around 50-55% is typical.)
This ratio shows there was huge pressure on buyers to outbid other buyers, and as a result, prices rose rapidly. Year-over-year, prices in December 2021 were about 20% higher than in December 2020.
There is no doubt in my mind that ‘flips’ continue to play a strong role in pushing prices to ever higher levels. If you need convincing, consider the following: as far back as 2013, flips had started to play a role, making up 4.5% of sales, with an average price increase of $85,800 between the buying and re-selling of the flip. From there, watch what happens:
| year | % of sales | avg. increase |
|---|---|---|
| 2013 | 5% | $85,800 |
| 2014 | 7% | $88,300 |
| 2015 | 14% | $110,000 |
| 2016 | 8% | $122,500 |
| 2017 | 8% | $141,000 |
| 2018 | 7% | $131,800 |
| 2019 | 7% | $121,000 |
| 2020 | 6% | $144,800 |
In 2021, flips made up a bit less than 5% of all sales. However, the average price increase from buying to re-selling increased to an incredible $222,000!
To put this in perspective, assume you bought a home for around $800,000 and flipped it for around $1,025,000. That’s an increase of more than 30%, which far outstrips the price increases for other homes, which ranged from about 12-25% for the entire year.
When a significant portion of homes are pushing prices up this quickly, how can that not have a huge impact on overall price levels?
Want to know more about current market trends? Just ask me, I'll be happy to help.
