These charts illustrate why it’s not time to panic about Toronto’s housing market—yet

The Toronto Real Estate Board just released its second full month of housing statistics following the introduction of Ontario’s new tax on foreign real estate buyers, and the headlines are alarming. One could get the impression that the Toronto housing market is in free fall.

But that’s not exactly true. The housing market has shifted significantly over the past three months, but things aren’t dire—at least, not yet. Here are some charts that illustrate why.

First let’s take a look at some scary charts. This one shows the percentage rise in average home prices, year over year.

Whoa, right? It looks like we’re headed to zero. But, because this is a year-over-year comparison, a downward trend isn’t necessarily bad. All it tells us is that price growth is slowing down.

Here’s the year-over-year change in the number of home sales in Toronto.

Pretty frightening. We’re down more than 30 per cent compared to this month last year. Again, though, this is a year-over-year comparison, so all it tells us is that the market is significantly more sluggish than it was in 2016.

Finally, here’s the year-over-year change in the number of active listings in Toronto. (“Active listings” are properties that were still listed for sale at the end of each month. So, this is essentially a measure of inventory.)

Again: whoa. June 2017 was the first month in at least a year to show any increase in active listings over the previous year. It looks like buyers suddenly have a lot more properties to pick from. Maybe sellers are starting to panic.

This is why everyone is in an uproar: with more properties on the market and fewer sales, 2017 is shaping up to be a lot less lucrative than 2016. But this may not be 2017’s fault, entirely. Last year was an incredible year for Toronto real estate, with record price increases and severely restricted inventory. The growth Toronto’s housing market experienced in 2016 was so strong that even a marginally less crazy market would look depressed by comparison.

Here are some charts that illustrate why 2017 may not be as terrible as it seems.

First of all, here’s what Toronto’s average home prices look like when we don’t make the comparison to the previous year. This is simply the monthly average, in dollars, plotted over time. We’re comparing month to month, instead of year to year:

It’s trending downward, for sure, but at the moment it’s not even as low as it was in January.

And here’s the change in the number of active listings from month to month. Once again, the dramatic curve disappears as soon as the comparison to to the previous year is taken out of the equation:

Finally, here’s the change in the number of Toronto home sales from month to month, without the comparison to the previous year:

Again, much less alarming.

The takeaway: Toronto’s housing market is undergoing some dramatic changes—but, for the time being, everything is still relatively stable. The numbers only look terrible by comparison with 2016, which was a bonkers year for real estate. It’s still possible that Toronto could experience a housing bust, but it’s not happening yet.