Real Estate Minute

TREB MarketWatch April 2011

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Market Report April 2011

Thomas Cook

Will The Spring Real Estate Market In Toronto Peak In April Or May?

The Toronto real estate house and condominium market this spring is looking a lot like last year with near record sales, low house and condo inventories and imminent interest rate increases predicted for this summer and beyond.

Last year, sellers finally realized by early May that they could get a good price for their homes and decided to list them all at once.  Inventory jumped almost 15% in one month and the average sale price peaked for the year.  After the dust settled, thru a busy June, the Bank of Canada raised their rates and the market slowed down.

This year in the GTA, listings of houses and condos are lower than they’ve been since before 2000 and so far there’s no indication that move-up sellers are going to jump into the market.

To get the full market scoop, click on our March Toronto Real Estate Market Report video below.

Why Are Toronto House And Condo Owners Not Moving?

Toronto Real Estate Board statistics show that the house and condo listing inventory for February was the lowest in board history. A lack of Toronto homes for sale is one of the major causes of the busy market we encountered last month.

In this February 2011 Toronto Real Estate Market Report we talk about some of the reasons we think are behind the scarcity of properties for sale.

February MLS sales totalled 6,266 in all the Toronto Real Estate Board districts. Although this number is down 14% from February of 2010, sales this year were actually higher than 7 of the last 12 years. Don’t forget the spring of 2010 was an exceptionally high period of sales and was not “normal” for the period.

33.6% of the market were condo townhouse and high-rise sales. This is up almost 2% from a year ago, reflecting an increasing marketplace reliance on affordable condominiums.

Despite the media scare tactics encountered in the last six months, the average sale price of $454,423 was up 5.3% from February 2010. It’s actually up from last May, the highest month in 2010.

Watch our entire February 2011 Toronto Real Estate Market Report to get all the details and our professional analysis.

To look at all the February statistics, download the entire Toronto Real Estate Board MarketWatch Report

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Toronto Real Estate Market Report For January 2011

The New Year started with some turmoil for Toronto real estate home buyers with word that the federal government was going to change their mortgage regulations.

Theoretically these new rules just apply to CMHC (Canada Mortgage and Housing), the entity that insures hi-ratio mortgages for buyers with less than 20% down payment.

It’s still unclear but historically the other high-ratio insurers also go along with the change in rules – for them it’s the ‘safer’ route but it does tend to restrict competition.

Otherwise, we were looking for a stable year in real estate for Toronto with moderate but not crazy activity like we had last spring.  We’ll see if these rule changes influence the market – at least on the short term – as some buyers rush to purchase to take advantage of the old rules.

So the news for Toronto house and condo buyers and sellers right now is the Federal Government’s change to the mortgage amortization limits available to all borrowers.

For the past two years we’ve had 25-year, 30-year and 35-year amortizations available to every Toronto home buyer.  As of March 18, the 35-year option will not be available any more.

The effect of this will be to reduce the amount of mortgage you could qualify for by between $22,000 to $37,000 if you have a 5% down payment and are purchasing a house or condo between $300-500,000.  Look on our blog for the February 4th article which explains this in more detail.

The government’s rationale for this change was to prevent home buyers from getting in over their heads with mortgage debt and to slow the market down somewhat.

Watch the complete report below to get all the details.

TREB January 2011 Market Report

From Toronto Real Estate Board

Very Favourable 15-Year Appreciation Statistics For Toronto Real Estate

The Toronto real estate market certainly started out like the proverbial lion for the first 5 months and then settled down with Toronto Real Estate Board house and condo listings and sales slowing down for the last half of the year.

One of the main reasons for that was the threat of imminent higher interest rates and the commencement of HST in Ontario - both happening in July. Those two events effectively distorted the Toronto house and condo markets by pulling sales forward that would have likely occured naturally later in the year.

Despite all the nay-saying in the media and by some prominent bloggers to be left nameless, the later half of the year really wasn't all that bad - in fact it was just a return to a more normal market.

So lets look at some of the 2010 year-end and December statistics.

Take a look at the 15-Year Average Sale Price Increase chart to see what happened each year since 1996 - the bottom of the market after the 1990 recession finally was over. The best phrase to describe it is "Everything In Moderation".

We certainly don't want excessive annual appreciation - look what happened to the US markets where that occurred - and we don't want manipulation of the market by lazy listing agents who underprice their listings to generate multiple offers and waste a lot of people's time!

Since our spring market is right on schedule this year, where are the opportunities for buyers and sellers?

With a balanced market, buyers will encounter fewer multiple offers which gives us the opportunity to negotiate excellent prices for our buyer clients. One of the guages of seller flexibility often is the days-on-market statistic, so ask us about that.

Although the talk on the street is that mortgage interest rates will remain relatively stable over the next few months, a wise buyer will lock in their rate with a written full mortgage preapproval. Our team has one lender who will lock in the rate for a full six months exclusively for our clients.

Because of the steady appreciation we've had over the past 15 years, many families have grown their equity and outgrown their homes. 2011 offers an excellent opportunity, because of low interest rates, to use that equity to move up to a larger house or condo.

Our Team would be honoured to be your real estate consultants and advisors in 2011. You can check us out at www.WhatYouSaidAboutUs.com and then call or email our office to start the process.

Thank you very much for watching our December 2010 Toronto Real Estate Market Report and have a great month.

Download the complete Toronto Real Estate Board Market Watch for December which includes all the monthly stats for the entire year.

Toronto’s Real Estate Market Firms Up In November

Well, the fall market is now over and we're into the traditional Christmas-New Years slow period.

Although the last half of the year has been slower than the first, 2010 overall has been excellent. By the end of December we should be very close to the record MLS sales attained during the 2009 calendar year.

I think most professional real estate agents are actually glad it's slowed down somewhat in the July to December period this year.

When the market is crazy like it was in the first 5-6 months, it's very frustrating for our buyer clients. They fall in love with a home, put an offer in but don't get it. Then they have to repeat that scenario perhaps four or five times before they get lucky and win the 'home' lottery.

Everyone's hoping that 2011 keeps an even keel with moderate sales price appreciation and very little multiple offer foolishness going on.

Watch November's Toronto Real Estate Market Report and learn what happened and what to expect going into 2011!

Thank Goodness The Summer Real Estate Market Is Over In Toronto

Traditionally the real estate market in Toronto has slowed down twice per year... in the July-August period and in the December-January period.  However that pattern was broken for the most part during the past decade.  Instead of everyone relaxing during the summer months since 2000, the momentum generated during busy spring markets carried over into summer and we just powered through.

I think, and history will either prove me right or wrong, we've just experienced a return to a 'normal' summer where listings and sales dropped off from their spring highs and, once everyone is back to work in September, more sellers get interested in selling and more buyers get motivated to buy.

If I'm right, then all the blaring headlines from newspapers etc about the imminent demise of the Toronto real estate market will all be wrong.  I've been tracking Toronto's market trends for 30 years now and I've certainly been off on occasion but I've also been correct more than not.

If I'm right, then it's a fabulous time to buy... low interest rates ranging from 3.7-3.8% for a fixed 5-year term make homes very affordable and motivated sellers are interested in negotiating prices.

Having said that, our Team has encountered 3 multiple offers since September 1st so they haven't gone away entirely.

I've put all of the data from the Toronto Real Estate Board together in our August Toronto Real Estate Market Report.  Click on the video below to get the latest perspective on our market!

July Toronto Real Estate Board Sales Lowest Since 2002

So is it just a traditional summer market slowdown or is it the harbinger of a long-term decline in Toronto real estate sales? Only time will tell (hindsight is always 100%).

Although the average Toronto house and condo sale price at $420,482 was up 6.3% over 12 months ago, it was down 3.5% from June and a significantly lower 6.2% from May 2010. It IS typical that the summer month's average does drop from the busy spring period of the year but the decline is not often as large as this.

House and condo sales across the Greater Toronto Area were down 31.2% from 2009 while listing inventory was up 21%. To put some relevance to that figure, in case you thought we were 'overwhelmed' with listing inventory, we had fewer listings in the month than during July of 2008, 2006, 2005 and 2004 (4 of the last 6 years).

This listings decline represented either the sale of homes that had to sell or the removal from inventory of homes by sellers who were unwilling to lower their expectations and decided to remove their home from the market.

This is not the time for agressive sellers looking for the 'best price ever'. It does however offer an 'opportunity' for Toronto move-up families... they'll get a lower price for their existing home BUT save on the purchase price of their new house or condo!

The ratio of sales-to-listings came in at 30.2%... just above neutral market territory (24-28%)... the lowest it's been so far this year. This reflects a more balanced market devoid of multiple offer 'crap' which distorts the numbers for everyone and adds a lot of stress to the home buying process.

Downtown Toronto condo listing inventory was up just over 50% in C01 (west of Yonge) and in C08 (east of Yonge). The average sale price in C01 was up slightly over June (+0.7%) and down in C08 (-3.7%).

August sales for the first several days of the month show a decline from July but we did have the long weekend Civic holiday in there. The listing inventory has so far remained steady for the month.

Take a few minutes, grab a coffee or tea, and watch our July 2010 edition of Toronto's Real Estate Market Report.