The FREEHOLD Real Estate Market is Worse Than CONDOS

Hello again and welcome back. Thanks for watching this week. Before I get into the stats and my updated home buying recipe, first a message from our third housing minister within 16 months. You said that you weren't seeking re-election in the upcoming election and you seem to have put some thoughts before accepting this new job. Why did you accept the job and are you running in the next election? I had decided about a year ago I guess that I wasn't going to run after conversations with my family. I got two young kids. It's actually my soon-to-be five-year-old's birthday party later today and this morning at 5 a.m. I was stuffing a creeper piñata with candy. So it's been a day but you know it was a tough leadership race last year and that balance wasn't right. That balance between you know sacrifice but also that ability to make a difference and is the sacrifice justified by virtue of the difference that you're able to make and that balance wasn't there and an opportunity came along where you can make an even bigger difference. Sean's a good friend and he's done important work on housing. Housing to me is outside of Canada-U.S. relations the most important file for you know I see millions of Canadians who are rightly angry about housing where they see their parents are better off than than they are even though they're working just as hard and have a job that's just as good. I see you know you look around every one of our communities is affected by homelessness and encampments and that's a consequence of housing. You look at productivity if you want to talk about productivity in this country and we should and people are leaving my city and my province and our country because they can't afford to live here and so it's you know look there I understand there's going to be a short runway. I'm not blind to that but if I can make a small difference if I can make a big difference I want to be the biggest difference that I can that's why I joined politics in the first place. I left law for politics and so you know it wasn't an easy decision by any means and yeah I consulted colleagues. I consulted my wife more than anything and I plan to run the next election in order to protect the progress and really in the short term make the biggest difference that I can. Alright so our last housing minister Sean Fraser quit, resigned because he wanted to spend more time with family because he was doing too much politics. Now this housing minister was going to quit a year ago politics altogether and now he's housing minister so one quit while he was housing minister and one kind of quit before but then changed his mind and now he's going to stick around with a government that's not going to succeed anywhere past probably a couple months. Now just a quick couple of other videos from some fellow realtors. I don't know whether to laugh or cry for this one but you be the judge and let me know. This is my newest listing. Where would I hide if I have to play hide and seek in this restaurant? Follow me. This is the dining area. I bet you can't find me. Look under the table. I'm right here. This is perfect commercial kitchen. I bet you're thinking am I hiding under the cabinet? I'm right here. This fucking cooler and freezer have nowhere to hide but I have to show it to you because they're so spacious. You must be thinking I'm in the basement. Nah. I'm right here by the ice cream maker. You want to know more about this listing? 47 Lakeshore East. Call me. Again I don't know what to think but you be the judge. Okay so the second and last one here is kind of interesting. He starts off like bullish kind of sounding on the market but then he turns it into like sell now before it's too late. So yeah check this out. As you see here who was it that posted this TD leaker? I don't know if he thought the same thing. This guy was just kind of making fun of him thinking this guy this realtor thinks the market's gonna rip in 2025 but it's not the case by the end of the video but it seems like it in the Buyer's market disappeared as Canada's home sales heat up. Failed thirds for the second month in a row. Here's the thing about real estate. It trends one way until it stops trending that way. It's not like the S&P 500 that chops up and down on a daily basis. Real estate moves a lot lower. Transactions take two three months to close. This is now looking like a trend and that means that sales are probably going to continue to go up or at least stay high or elevated and prices will likely follow for the next three to six months. Sales went up 26% in November and then again 30% in October and Capital Economics is predicting that the average monthly price gains of 0.4% will happen between now and June of 2025. Now I agree with this obviously because that's what I've been saying but what I am not saying is that we're out of the woodwork. What I am saying is that if you've been holding on to a property that you've been meaning to get rid of for the last couple years, the next couple months might be your chance to get out without losing as much money as you thought or possibly breaking even or just making more money. Alright a lot of flip-flop. Might want to get out, might want to make more money. I don't know what's going on there but mixed signals from that guy. Might have to edit out the audio or the music in that one because it might get copywritten on here but I'll obviously do that if needed. Alright now let's get into this week's statistics starting with the home buying recipe. Okay so here it is the home buying recipe. I probably should have updated this a week or so ago when they started dropping the rates even more or when they continue to drop the rates I should say. But starting with the falling prices of course they are falling. I don't care what anybody says we're making new lows every year. You see the high there 2022 then 2023 the next peak was a high and then this year maybe November maybe in the spring but it's lower than 2023 so it's very easy to see. Prices are falling year over year and we haven't even hit the recession yet. Maybe we have but it hasn't been announced. Now the big change was of course this time was the falling rates and that big half percentage cut there which of course justifies this falling rates. Fully full now the battery is a green check mark there so we have two of the four. And of course high unemployment there we're up to 6.8 percent get over 7 before we see another one there. And I forget where I get this from I'll post a link in the description I think it's macro trends or something trends I get this from with this nice chart. But someone just posted another thing and they forecast unemployment to go down. Now I didn't see any reasoning in the message that I got but yeah they're forecasting it to go down in the short term. But regardless it is going up it's been trending up since last year and then moving on to high mortgage delinquencies still very low of course they have trended up as per the one battery bar there. But it is still very low for now and I'm expecting to see that because this is a lagging indicator the last data there is from September. So of course we've seen unemployment rise in November so in a couple more months we'll probably see this up to those previous lows which will deserve another battery bar there. Now talking about mortgage delinquencies and bank sales here are the power of sales on the Toronto Real Estate Board and yeah you can see the purple ones there now we did some data merging between boards so like my board nagger actually which I just dumped I'm just with TREB now we joined the Toronto Real Estate Board database so did London and some other places so we lost some listings on the it's so a lot of listings and then they merge some were duplicates and whatnot so anyway now I'm just using TREB data so I've turned it purple there when the changes were made so that would have been a little bit lower because of the duplicate listings and whatnot but regardless when you look at the next week December 22nd there the last week on this chart we are significantly higher and if you look at last December and again this is merged data now compared to last December it's 193% higher than last December so yeah bank sales are still trending up at a significant pace and no signs of letting off anytime soon. Okay now these next four charts are in response just to some debate and discussion that I've had recently and it's more than one person I did talk to somebody on the phone this week and we talked about the difference between freehold and condos and a lot of people out there influencers and whatnot and I'm not going to mention any names but you see them on X and whatnot they believe that the freehold is kind of holding strong while the condos are taking a big hit and well I didn't agree or disagree but I think they're all going to follow the same trend eventually but then I looked into the data here and this is what the data shows us so again you hear it you'll probably heard it yourself people say well the freehold strong it's not happening you know nothing's happening the prices aren't going down but the condo is getting destroyed and I've never been kind of either side of that narrative but I decided to separate them here now I just want to explain these numbers this is all areas in TREB now that TREB is divided into two parts we have the members which are 73,000 members but then we have all the active realtors that are part of the same database so the Niagara Association of Realtors where I used to be they are on this this data here they're included in this data but they're not TREB members and same with London Ontario they're included in this so there's 95,000 members data in this database and in this data I'm going to show you but again TREB has 73,000 members so don't get confused so this is 95,000 way over half of the realtors in Canada so this is pretty significant here and again Ontario the biggest province on top of that so let's check this out here so this is the number of sales by year going back to 2014 as far as this data goes back on the system that I'm using so the number of sales and this is on a yearly thing if I did the monthly sales it'd be up and down like one of those heart you know diagram machine things so an ECG or whatever it's called you know it just goes up and down because it's seasonal right so yearly we did the number of sales and it's down 22% from the 10-year average on freehold and condos is only down 18% so again looks like freehold's taking a bigger hit on the number of sales moving on to the actual average prices here so let's see how the prices are doing now the price I did monthly and I did it from the peak here you see those two peaks right in the middle of course you can't miss them and again same data all areas tons of listings 95,000 realtors listings on here now before I go on I want to make one quick correction to a chart I put on an x earlier this week I put as of December 18th I think it was because I thought they would take the partial months data but it doesn't only takes full months on these charts so again our last full month was November 2024 and this is as of November 2024 down 21% the freehold market and the condo market is down 17% from the peak so again the freeholds have lost more value on a percentage basis than the condos and yeah I talked about dollar values too way more in dollar values but again we're going to compare percentages here okay this is all freehold and this is all condos so condos could mean apartments it could mean townhouses it could mean a freehold with a condo road which you could list either but regardless and freehold could mean detached semi-detached or townhouses so a townhouse could float into either of these categories here so what I did was I took the extremes because I had again somebody call me out and say well if you compare just detached to apartments uh condos you're going to see a big difference okay we're going to drill down we're going to go on the extreme ends freehold detached most expensive kind of residential real estate out there to the apartment condos the least expensive and least desirable some could say real estate out there so let's check this out here so these are the number of sales by year just like I did with all of them previously there so freehold detached down 18% from the 10-year average so down significantly and condo apartments they're down more so last time the freeholds were down more but now the condos are down 21% from the 10-year average so they almost flipped last time if you look here I'll go back it was down 22% for freehold and down 18% for condos and now it's flipped freeholds and actually not sorry condos aren't down 21% they're down or 22% they're down 21% so yeah they pretty much flipped those stats but now looking at the actual prices here now we see the prices freehold again detached only the detached most expensive to the least expensive arguably condo apartments and look at the detached down 23% from their peak in February 2022 and as of November 2024 23% they're down and the condos are only down 16% so yeah let's go back to all condos and all detached or all freehold again and it was 21% for freehold and 17% we're seeing that gap widen now so it's actually worse off for detached so detached have lost 23% from the peak and condos are only down 16% from the peak I should say freehold detached and condo apartments so yeah I found that very interesting now the number of sales of course is opposite but it doesn't matter the the prices are still affected so again there's a lot of discussion out there that freeholds are not affected much and they won't be affected and they're going to be safe well I think that if you're looking at certain sub areas within Toronto or certain areas in certain places yes you can make that argument but when you're looking at the big picture it's not the case and I like to look at the big macro picture on all of this so some places yes they're okay but some places they're getting decimated way worse than they would than condos so in some places they'd be down 30% and condos would be down 15% okay so that's it for this week leave your comments as always I do browse through lots of them lots of debate in there I love watching and reading it and Merry Christmas to everybody as you can see here in my background I have some symbolic symbols on the trees with credit cards and debt and gas cans and keys and lighters and whatnot of course you know what that's for but anyway thanks for watching and I'll see you next time