Here are the statistics for last month:

Over the last 5 years, the average number of condos on the market for sale in December has been 655. This past December, we had only 300 available. Inventory remains less than half as typical.

Over the last 5 years, the average number of condos on the market that sold in December has been 250. This past December we had 207 sales, a little less than normal.

Low supply is keeping us in a Seller's market. 

The median price of a downtown condo was up significantly from $609,000 in November to $638,000 in December.
 

In December, the average price of a detached home fell from $1,301,382 to $1,145,892. That's an incredible drop in prices of about 11.9% in one month! Since January 2017, home prices are now down -14.3% while condos are up 38.6%. 
 

Only considering 2018, home prices are down 10.8% while condos are up 16.0%. December's massive drop of 11.9% in housing prices is pretty shocking, especially in contrast to the rise in condos prices. Why? 

We wrote previously about it getting more difficult to borrow as lenders implement stress tests. We notice the high end housing market slowing down as fewer homes are transacting in the luxury market. Perhaps these stress tests are impacting the high end market more than entry level homes. As a thought experiment, even if prices were flat, having fewer high end homes selling will lower the average price statistics all by themselves. For example, in November about 14% of the detached sales were over $2m but in December that number dropped to 10%. 

I think it's a combination of both happening, a slower high end market with a modest drop in prices. Visiting homes for sale, we don't see such a dramatic drop in house prices that the statistics may lead us to believe. There is evidence that the high end has slowed down which partially explains the significant month to month price drop in the statistics. 

We expect the Spring months to have more representative prices returning to the recent averages. December and January always have much fewer sales which can result in anomalies to the average. We expect Toronto real estate to be a very calm and uneventful 2019.