April 2012 Market Report

April was one of the strongest months on record, adding to the momentum and the 9,690 residential sales reported by the Toronto Real Estate Board in March. The story remains unchanged. Strong market conditions continue to be driven by record low mortgage interest rates and a supply of resale properties that is insufficient to meet the demand. Although the number of properties coming to market is increasing, the supply remains low. As a result new, well priced and well located listings see competition between buyers, all seeking to purchase properties in this environment of low mortgage interest rates.

In April 10,350 residential properties were reported sold. This is an 18 percent increase compared to the 8,778 properties reported sold in April 2011, and a 7 percent increase over the sales achieved in March. Notwithstanding numerous articles and publications predicting a decline in the Toronto resale market, the 31,109 sales achieved during the first 4 months of 2012 point to a continuing strong, frothy market.

In April the market place welcomed 16,436 new listings. This represents a 14.7 percent increase compared to 14,335 properties that came to market in the same month last year. Notwithstanding this substantial increase in new listings, given the number of sales, it did not have a dramatic impact on inventory levels at the beginning of May. We entered May with 18,379 available properties, and while an improvement over last May, this supply continues to remain insufficient to meet demand. Last year there were 17,702 available listings at the beginning of May, 3.8 percent less than this May’s active listings. The supply of new listings that came to market in May has not impacted the resale landscape. There is 2.2 months of supply of properties for sale in the greater Toronto area, with some trading areas, particularly some of the eastern neighbourhoods, averaging less than 1.4 months of supply.

Not only was there demand for new properties coming to market, but once listed, they sold very quickly. In April, all residential properties that came to market sold in only 21 days, the same pace achieved in March of this year. Last April all properties coming to market took 22 days to sell. Sales even in Toronto’s most expensive central neighbourhoods took only 22 days to sell, with sales in some neighbourhoods taking less than 20 days. Toronto’s eastern neighbourhoods continue to see the fastest sales pace. Over all it took only 20 days for all east Toronto properties to sell. In some neighbourhoods it took less than 15 days. In the neighbourhoods north of the Danforth all semi-detached houses that came to market sold in a jaw-dropping 7 days. This is clearly not a balanced market. Sales in 30 to 40 days are more consistent with a balanced market.

It is not surprising therefore that April produced another record average sales price. The average price came in at $517,556, eclipsing the previous record of $501,077 set in March. April’s average sale price was 8.5 percent higher than the $476,802 average sale price recorded in April 2011. A new record for properties having a sale price of over $1 Million was also recorded. 643 properties in this category were sold in April, a 23 percent increase over the previous record achieved in March. It is hard to believe that in just three years this price point for sales has almost tripled. In April 2009 only 216 properties in this category were reported sold. It should also be noted that 92 properties having a sale value of over $2 Million were also reported sold. Although not Manhattan, Toronto’s prices are certainly rising.

A detached home in Toronto’s central districts has become too expensive except for exceptionally high earners or equity-laddened move up buyers. In April the average sale price for detached homes in central Toronto came in at $1,249,613, a slight increase from the $1,235,399 recorded in March. Toronto’s eastern neighbourhoods remain the most accessible for buyers looking to buy a detached house. On average a detached house in east Toronto sold for $560,449, however it cost more than $900,000 to buy a house in the Beaches neighbourhood of east Toronto

The annual principal and interest payments on a 95 percent high ratio loan based on April’s average sale price of $517,556 would amount to approximately $28,000, based on a 3.2 percent interest rate. The average annual household income in Toronto is slightly over $90,000. For the time being mortgage carrying costs remain less than 32 percent of annual household incomes, but only marginally. Continued price increases coupled with an increase in mortgage interest rates would see many buyers, especially first time buyers failing to qualify. The strong Toronto resale market is, due to rising average sale prices, now very dependent on historically low mortgage interest rates for its continued bouyancy.

 

 

March 2012 Market Report

March resale results as reported by the Toronto Real Estate Board show no signs that the Toronto and area market place is likely to see any dramatic change in the foreseeable future. March’s performance was very strong, continuing a string of very strong months extending back to the beginning of 2011. One could argue that except for a short hiatus, from September 2008 to March 2009, the Toronto resale market has grown consistently from 1997 until the present. As has been discussed in previous reports, if there is any problem with the Toronto resale market place it is the shortage of available properties for sale.

In March 9,690 residential properties were reported sold. This represents a 7.8 percent increase compared to the 8,986 properties reported sold in March of 2011. These are strong resale numbers, demonstrating the buoyancy of the Toronto and area market place.

In March 16,308 new listings were processed by the Toronto Real Estate Board. This is a 7.1 percent increase compared to the 15,224 new listings that came to market in March 2011. As a result of the new properties coming to market we begin April with 16,920 active listings, only 2.2 percent more than 16,563 active properties for sale at the beginning of April 2011. The supply of properties for sale in the greater Toronto area continues to hover at 2.2 months, far from the supply necessary to support a balanced market. The neighbourhoods east of the downtown core continue to have serious supply problems, averaging less than 1.5 months. Conditions in these eastern neighbourhoods have lead to constant bidding wars and escalating prices.

All properties throughout the greater Toronto area sold very quickly in March. The continuing shortage of supply and the record low mortgage interest rates are responsible for this incredible pace. In March all residential properties coming to market (on average) sold in just 21 days. This amounts to a 6 percent improvement over the 23 days (which was very rapid) it took properties to sell in March 2011. Properties in Toronto’s central, and most expensive districts, took only 21 days, as was the case in February. Again Toronto’s eastern neighbourhoods took only 19 days, similar to the length of time it took properties to sell last month. Toronto’s western districts took only 21 days for all properties to sell, an improvement over the 26 days they took to sell in February. In a balanced market, sales would take place between 30 and 40 days, on average. Many individual districts, Riverdale, Leslieville, Beaches were even faster, averaging just over a startling 12 days. It is not surprising, therefore, that sale prices in these neighbourhoods came in at 106 percent of the list prices.

The average sale price for the greater Toronto area came in at $501,614. In February the average sale price topped $502,000, and remains the all time monthly average sale price record. If this pace continues the annualized average sale price will exceed $500,000 for the year, setting a new record and making Toronto one of North America’s most expensive cities. A record number of properties having a value of $1 million or higher sold in March. 521 sales with prices exceeding $1 million were reported sold, eclipsing the previous record for any March of 391 (2011), and an increase of 28 percent compared to the 401 properties sold in this category in February. This category of properties now represents almost 6 percent of all properties reported sold.

Detached houses in Toronto’s central neighbourhoods are now out of reach for most buyers. In March the average sale price for detached properties in central neighbourhoods was $1,235,399. Average prices for detached homes in Toronto’s eastern districts came in at $553,656 and in the western districts at $644,731. No doubt this partially explains why Toronto’s eastern neighbourhoods are so frothy. It should be noted, however, that in Toronto’s prime eastern districts average sale prices are averaging over $800,000.

The long predicted demise of the Toronto market does not appear to be anywhere on the horizon. Early April data (April 5th) points to another strong month ahead. The factors responsible for Toronto’s strong market, net migration and household formation, low mortgage servicing costs, affordability and inventory remain unchanged. Having said that, we need to be concerned about the rapidly increasing average sale prices. The average price of $501,614 was almost 10 percent higher than the average sale price recorded in March 2011. To date these price increases have been sustained by the low mortgage servicing costs. A noticeable increase in mortgage interest rates will certainly impact this market.

 

February 2012 Market Report

Since the beginning of this year there have been numerous articles written about the impending doom in Canada’s housing market. A recent example appeared in MacLean’s Magazine. Its headline says it all: "You are about to get burned: Canada looks exactly like the U.S. before its devastating housing crash – maybe even worse. Why it’s officially time to panic." However an examination of the article’s content reveals that it is short on any hard data that would indicate that it is time to panic. The premise of the article is that money is cheap, Torontonians are spending recklessly, the condominium apartment market is overbuilt, and a day of reckoning is coming and soon.

The latest market data provided by the Toronto Real Estate Board does not support the MacLean’s position. In fact the hard data that is available indicates that the greater Toronto market place is buoyant, impeded only by a lack of available properties for buyers to purchase. In February, 7,032 residential properties were reported sold, a 16 percent increase compared to the 6,058 reported sold in February 2011. Although these reported sales are not a record, they are extremely strong. For example in February 2007 6,772 sales were recorded. 2007 continues to be the best year for sales, reporting 93,193 properties sold.

In February 12,2684 new listings came to market. This amounted to 11.2 percent more than the 11,404 new properties that came to market in 2011. This is a welcome increase, but insufficient to meet the demand. At the end of February there were 14,546 active listings, almost identical to the 14,525 that were available last year. The inventory of 14,546 available properties represents a supply of only 2.2 months. A balanced market would require at least 3 months supply. In many Toronto neighbourhoods the supply remains exceedingly low. In the eastern districts in close proximity to Toronto’s central core the supply continues to average only 1.4 months. It is these conditions, coupled with buyer demand, that have led to many instances of competing offers for properties with concomitant increases in sale prices.

The high demand and exceptionally low mortgage interest rates are resulting in all properties coming to market selling very quickly. This has been the case for most of 2011 and now into 2012. In February all residential properties coming to market (on average) sold in 24 days. This is a 10 percent improvement compared to the 27 days properties took to sell in February of last year. Properties in Toronto’s central, and most high priced districts, took only 21 days. Toronto’s eastern districts took only a jaw-dropping 19 days, driven primarily by sales in Riverdale, Leslieville and the Beaches. In those neighbourhoods all new properties coming to market sold in approximately 12 days. As in January, properties in western districts took the longest to sell at 26 days. Many districts are witnessing the fastest sales in their history.

It is not surprising that February’s average sale price for the greater Toronto area broke a record, coming in at $502,508. This is the first month that the average sale price has exceeded $500,000 and tops the previous record of $485,402 achieved in May of 2011. Sales took place in all price categories. There were 407 properties that sold having a sale price that exceeded $1 Million. A look at average sale prices across Toronto indicates that a detached house (on average) in western neighbourhoods now costs $643,217. In central Toronto a detached house is now within reach of a select few, coming in at $1,239,256. Eastern neighbourhoods are the least expensive to purchase a detached home, but even in those areas prices are climbing. The average detached home is now $549,763, but in areas like Riverdale, Leslieville and the Beaches the average sale price is substantially more than $700,000.

So the Toronto resale market does not reflect the negative assessment of economists for the Canadian housing market. Prices are strong, demand exceeds supply, and sales are taking place at a record breaking pace. There are a number of factors that are responsible for a real estate market: net migration and household formations, servicing costs, affordability, household incomes and inventory. Current trends favour a continuation of Toronto’s existing resale market. Toronto’s record breaking average sale prices have yet to create an affordability problem. With a 10 percent down payment, a household income of only $54,000 would be required to purchase the average resale property in the greater Toronto area. With average household incomes of approximately $86,000 in Toronto, affordability is not an issue. However a combination of continued average price increases and an increase in mortgage interest rates would challenge the ability of the average Toronto household to purchase a home.

 

January 2012 Market Report

 

The first month of 2012 began strong reporting 4,567 residential properties sold, an 8.8 percent increase compared to the 4,199 properties reported sold in January 2011. January’s result could have been even stronger if there was a sufficient number of available properties to meet buyer demand. During January some of Canada’s major banks offered promotional mortgages that saw interests rates plummet to 2.9 percent for 5 year fixed terms. This inturn drove buyers to market, trying desperately to capitalize on these low mortgage rates. Competing offers on properties that came to market were the norm.

In January 9,655 new properties were listed for sale by sellers. This was 8 percent more than the 8,937 that came to market in January 2011. Unfortunately the increase in new listings as compared to last year did not improve the overall supply. At the end of January there were only 11,009 residential properties available for purchasers to buy. This is a decline of more than 9 percent compared to the 12,107 properties that were available at the end of January 2011. The inventory of 11,009 available properties represents a supply of only 2.2 months, far from a balanced market. In some neighborhoods the supply of inventory is even less. For example, in the neighborhoods immediately east of the central core of the City of Toronto there is only 1.4 months (on average) of available resale housing. These conditions will lead to fierce competition for properties that become available, resulting in an increase in sale prices.

Base on the tight market conditions we are experiencing it is not surprising that all properties that came to market sold quickly. In the greater Toronto area on average all properties sold in 32 days. This compares to 36 in January 2011. In the City of Toronto sales were slightly faster, taking only 31 days. Central properties also took 31 days on average to sell. Properties sold very quickly in Toronto’s eastern neighborhoods, while Toronto’s western districts lagged behind dragging Toronto’s over-all days on market down. Eastern properties sold in only 27 days, with eastern neighborhoods close to Toronto’s central core (Riverdale, Leslieville, The Beaches) all selling on average in less than 20 days.Western neighborhoods took 38 days to sell.

Although 32 days on market was slower than the brisk pace of sales throughout the fall months, 32 days on market for January,historically a slow month, is quite an accomplishment.We anticipate that this pace will accelerate as the market gears up for the seasonally more active spring market.

In January the average sale price of all properties sold in the greater Toronto area was $463,534, an increase of 9 percent compared to the $425,762 recorded in January of 2011. Increasing average sale prices has given rise to a greater number of high end sales (properties having a sale price of $1Million or more). In January 201 properties fell into this category. This compares vary favorably with the 145 properties having a value of $1 Million or more sold in January of 2011. In 2010 there were only 137, and shockingly a mere 28 were reported sold in January 2009, a period of world wide economic turbulence. Some neighborhoods in Toronto are becoming more pricey. For example the average detached home sold in central Toronto came in at $1,151,542, double what the average detached home sold for in the east ($ 517,449) and Toronto’s western districts ($560,451).

As we stated in the December Market Report, forecasts for 2012 for the greater Toronto market place remain positive. January’s performance is certainly consistent with the forecasts of the Toronto Real Estate Board and Canada Mortgage and Housing Corporation. There are some concerns that historically low mortgage rates and a lack of resale inventory have driven house prices to unsustainable levels. Last year sawToronto’s average sale price increase by 8 percent compared to 2010. Notwithstanding these price increases, affordability continues to favour buyers. Based on the average income for Toronto families ($82,000), the average priced home ($463,534) is still within reach. Based on even a 10 percent down payment, mortgage servicing costs still remain below lending institutions 32 percent gross debt service ratios. The key to the market’s continued strong performance remains low mortgage interest rates. If and when they begin to rise the market will become less frothy and move to a more balanced state.

 

December 2011 Market Report

 

2011 ended strong, with the Toronto Real Estate Board reporting 4,718 residential properties sold for the month of December. This represents a 10.1 percent increase compared to the 4,286 properties reported sold for the same month in 2010. The market landscape remains unchanged. Historically low mortgage interest rates and strong buyer demand fueled the Toronto resale market throughout 2011.

As forecast, 2011 proved to be the second best year on record, behind only the 93,193 residential properties reported sold in 2007. The 4,718 sales for December brought the total sales for the year to 89,347 properties sold. The next best year for reported sales was 2009, with 87,308 properties sold. By all accounts 2011 was an exceptionally strong year.

In December 4,811 new listings came to market. This represents a 13.8 percent increase compared to the 4,229 new properties that came to market in 2010. The new properties that came to market in December brought the total number of properties available for sale for the beginning of 2012 to 12,868, up 14.9 percent compared to the same period last year. Notwithstanding the increase in both new listings and properties available for sale in December, the 12,868 properties available to buyers to start the New Year is still a historically low number. An inventory of 12,868 properties represents 2.2 months of supply. A balanced market is between 3 and closer to 4 months of supply. As a result it is anticipated that well priced properties in sought after neighborhoods will attract considerable competition as the New Year begins. The unusual warm winter weather we have been experiencing in early January should also act as a market catalyst.

Average days for properties on the market rose in December from previous months. This is not unusual, as December and January are historically the two slowest months in the market cycle. In December all new properties (on average) coming to market took only 32 days to sell. These numbers represent the speed of sales in the entire greater Toronto area. In the City of Toronto the pace was a little faster at only 30 days. On a district-by-district basis, properties in Toronto’s west end took 31 days to sell, 31 days for central properties, and a jaw dropping 27 days for all east properties. The in –demand neighborhoods continue to be trading areas just east of Toronto’s central core. In particular Riverdale and Leslieville are markets that appear to be on fire. Even in December average days on market for these neighborhoods was only 15 days. No other trading areas in the central or western districts equaled the pace of sales in theses districts.

Although it may be too early to forecast, it would appear that headed into 2012 the pace of sales, at least for the market as a whole, may be slowing. In September and August average days on market for properties was 27days. In October average days came in at 26. In November average days increased to 29. It increased again in December to 32. Notwithstanding this slight slow-down, 32 days on average for all monthly sales continues to be very brisk by historical standards. For example, last December all properties took 37 days to sell.

In December the average sale price for all properties sold was $451,436, down by 6 percent from the sale price of $480,421 achieved in November. The decline in December is common in the annual market cycle. Over 191 properties with a sale price in excess of $1 Million were reported sold. 24 of these properties had a sale price in excess of $2 Million. Conversely of the 4,718 properties sold, 1,258, or more than 26 percent, had a sale price between $300,000 and $400,000. December’s average sale price of $451,436 represents a 4 percent increase compared to the $433,523 average sale price achieved in December 2010.

Forecasts for 2012 are mainly positive. The Toronto Real Estate Board and Canada Mortgage and Housing Corporation’s view is that because of broader economic conditions prices will increase moderately accompanied by slightly lower sales. Sales should see about 85,000 properties sold, and prices will increase over the year by a modest 4 percent. In 2011 prices increased (annualized) by 8 percent, from $431,276 2010 to $465,412 this year. Toronto has managed to avoid the housing market pit falls that have plagues many other jurisdictions, particularly the United States. Markets in the States have been in decline since 2005. If the forecast for 2012 proves accurate, and there is every reason to believe they will, we will enjoy a strong market, punctuated by moderate price increases, which in conjunction with low mortgage interest rates will ensure continued affordability.

 

November 2011 Market Report

 

In November 7,092 residential properties were reported sold by the Toronto Real Estate Board. This compares to 6,384 reported in November 2010, an 11 percent increase. November extends the string of consecutive months that have witnessed substantially improved results compared to the same month in 2010. This improved market remains driven by historically low mortgage interest rates, strong buyer demand, and an under, though improving, supply of available properties for sale.

With only December’s results to tabulate, it is a safe prediction that 2011 will be the second best year on record, behind only the 93,193 residential properties reported sold in 2007. As at the end of November 84,859 properties were reported sold. Typically between 4,200 and 4,500 properties are reported sold in December. This means that in 2011 over 89,000 (and more likely closer to 89,500) properties will be reported sold. The next best year to 2007 prior to this year was 2009 when 87,308 properties were reported sold. It does not appear that this year will break the 90,000 property plateau for the second time in record keeping by the Toronto Real Estate Board.

In November 9,786 new listings came to market. This represents a 14 percent increase compared to the 8,586 new properties that came to market in November 2010. The new properties that came to market in November bought the total number of properties available for sale at the end of the month to 15,551. By historical standards 15,551 available properties remains insufficient to meet buyer demand. For example, at the end of November last year, there were 18,305 properties available for sale, 15 percent more than this year. An inventory of 15,551 properties represents a little more than 2 months supply, far from a balanced market. A balanced market would have 3 to 4 months of supply. As a result, well priced properties in sought after neighbourhoods continue to attract competing offers. Although an increase in inventory levels is forecast for 2012, it is unlikely to be sufficient to create a balanced market.

It is no surprise that average days on market continues to be exceptionally low. In November all new properties (on average) coming to market took only 29 days to sell. This is for the entire greater Toronto area. The market in the City of Toronto was even faster, averaging only 27 days for all sales. In November 2010, it took 34 days for all properties to sell in the greater Toronto area. The trading areas just east of Toronto’s central districts (Riverdale, Leslieville, the Beach) remain the most in demand neighbourhoods. Sales in these neighbourhoods are averaging about 16 days on market. In fact eastern Toronto as a whole remains the most popular trading area averaging only 24 days. Central properties took 27 days to sell, while west properties appear slightly less popular at 30 days. It should be noted that at 29 days on market for the greater Toronto area, this marks the slowest month since the beginning of the year. Average days on market for October was 26 days, while September and August were both 27. This slight slow down may be due to seasonal changes, but more likely reflects the increase in available inventory (as slight as it was) coupled with continually rising house prices.

In November the average sale price for all properties sold was reported as $480,421. This represents the second highest monthly average on record, only behind the $485,436 achieved in May of this year. This is an interesting development given that average sale prices historically fall off in November. The increase in average prices was driven by 365 sold properties that had a sale price of more than $1,000,000. Of those 365 sold properties 55 had an average sale price of more than $2,000,000, 6 of which were condominium apartments. November’s average sale price of $480,421 represents almost a 10 percent increase compared to the average sale price of $457,494 achieved in November 2010.

As we head towards 2012 forecasts (Toronto Real Estate Board, Canada Mortgage and Housing Corporation) for next year are mainly positive. The view is that the Toronto market will moderate slightly, with sales slightly lower than 2011, and average price increases declining to about 4 to 5 percent from 2011’s almost 10 percent increase. A moderate decline in average sale prices is most welcome. Markets that have suffered severe declines in average prices (Ireland, Spain, United States) saw precipitous average price increases before dramatic declines. Moderate increases support affordability and insure that severe price declines will be avoided if markets change.

 

 

October 2011 Market Report

 

October’s market performance extended the string of consecutive months during which sales results substantially exceeded the performance of the same month in 2010. In October 7,642 residential properties were reported sold, comparable to the 7,658 sales reported by the Toronto Real Estate Board in September. October’s results represent a 17.5 percent increase compared to the 6,504 reported sales in October of 2010. As 2011 heads to its conclusion, sales remain strong, driven by historically low interest rates.

Based on the first ten months of reported sales it can confidently be predicted that 2011 will be the second best sales year in the history of the Toronto area market place. At the end of October 78,012 properties had been reported sold by Toronto realtors. At the same period in 2010 only 75,321 properties had sold, an improvement of almost 4 percent. Sales for 2011 will come in at approximately 90,000 properties, behind only 2007’s 93,193 reported sales.

The number of new listings coming to market continues to increase on a year-over-year basis. In October 12,405 properties became available for sale. This represents an 18 percent increase compared to the 10,507 properties that became available in October 2010. For a number of months the new properties becoming available during the month have substantially exceeded the number of properties that came to market in the same month in 2010. To date this pattern has not resulted in an excess supply of available properties. At the beginning of November there were 17,794 properties available for buyers to purchase. This is less than the 18,808 available at the beginning of October, and 18,305 available at the beginning of November of 2010. Forecasts for 2012 are predicting that inventory levels will increase to levels not seen since the pre-recession levels of 2008. These increases will, however, still be moderate by historical levels, but we may witness a moderate shift to a balanced market after more than two years of a strong seller’s market (Canada Mortgage and Housing Corporation). Based on October’s sales results, the available listings represent 2.33 months of supply, down from the 2.4 months of supply available at the beginning of October. This lack of supply will no doubt result in brisk sales in November and December of this year.

Average days on market improved to 26 days in October from the 27 days properties took to sell in August and September of this year. In October 2010 it took 31 days for properties to sell in Toronto. Days on market improved by 18 percent year-over-year, again a further indication of the continuing strong seller’s market. As has been the case throughout this year, the strongest trading areas have been Toronto’s eastern districts. In October it took only 22 days on average for all eastern district available properties to sell with the eastern districts closest to Toronto’s central core taking only 15 days on average to sell. This is an exceptionally fast pace.

In October the average sale price for all properties sold came in at $478,137. This represents the second highest monthly average sale price achieved since May of this year. Since May monthly average sale prices had declined. In August the average sale price retracted to $450,920 but has rebounded since. The increase in the average sale price was assisted by the 371 properties sold in October that had a sale price of $1,000,000 or more. That represents almost 5 percent of the total number of reported sales for the month.

Once again Toronto’s resale market place has produced strong sales numbers in October. Every market indication is that the resale market will continue to produce strong sale results to year end. The additional supply of available properties coupled with strong employment numbers and low mortgage interest rates will continue to sustain the current market conditions.

 

September 2011 Market Report

 

In September 7,658 residential properties were reported sold by the Toronto Real Estate Board. This was an improvement over the 7,542 sales reported in August, and continues the pattern of consistently strong sales results throughout 2011. September’s performance represents a 25 percent increase over the 6,138 sales reported in September of 2010. Whereas the number of sales reported in 2010 began to decline in the second half of the year, this year the opposite has occurred, with sales increasing on a year-over-year basis. This pattern should continue to year-end.

Sales through the first nine months of this year now total 70,588 properties. This represents a 2.6 percent increase over the number of properties reported sold to the end of September 2010. Confidently it can be predicted that total sales for 2011 will amount to about 90,000 properties, making 2011 the second best year in the history of Toronto sales, exceeded only by the 93,193 properties reported sold in 2007.

Another pattern that is developing relates to the number of new listings coming to market each month. For three consecutive months the number of new listings coming to market has exceeded the same month in 2010. In September 14, 727 new listings came to market. Last September only 12,899 new listings became available for sale. September’s new listings represent a 14 percent increase compared to last September’s new listings. Slowly this increase in monthly listings is increasing the inventory of available listings, but still below the number of listings that are required to constitute a balanced market. At the end of September there were 18,808 available listings, 8 percent lower than the 20,334 available last year at the same time. Based on September’s sales results, the available listings represent 2.4 months of supply. This is still a seller’s market, which will continue to force buyers to compete for well-located, attractively priced properties.

Average days on market came in at 27, consistent with the average days on market for August. In August 2010 the average days on market were 33. September’s pace was very rapid, consistent with a seller’s market. Toronto’s eastern districts continue to outpace the overall market, coming in at only 23 days. All of Toronto’s trading area were 26 days or better. The slower trading areas for the most part are within the G.T.A’s suburban markets, north and east of Toronto.

In September the average sale price for all properties came in at $465,369. In September 2010 the average sale price was $425,757. This represents a 9 percent increase. Prior to September there were three consecutive months of declines in the average sale price. In August it was $451,663. September’s average sale price represents a 3 percent increase over August. 81 percent of all properties sold had a sale price of $500,000 or less. 334 properties achieved an average sale price of $1,000,000 or more, with 48 properties coming in with a sale price exceeding $2,000,000.

Notwithstanding the economic turmoil throughout the world Toronto’s residential resale marketplace remains unaffected by these challenges. Early October statistics indicate that October will be a strong month, dramatically exceeding the results achieved in October 2010. Clearly affordable debt servicing costs continue to drive the market, causing buyers, particularly the 81 percent of buyers that purchased properties valued at $500,000 or less.

 

August 2011 Market Report

 

The Toronto residential resale market continued its string of strong monthly performances with 7,542 sales reported by the Toronto Real Estate Board. This represents a 24 percent increase over the 6,083 sales reported in August of 2010. This was the fourth consecutive month that saw a substantially better performance this year compared to the same month in 2010. The 7,542 sales reported in August were down from the 7,922 reported in July, and substantially lower then the 10,056 reported in May. These declines are not indicators of a falling off market, but merely reflective of historical seasonal cycles.

Sales through the first eight months of 2011 now total 63,157. This figure marginally exceeds the year-to-date sales achieved to the end of August in 2010. At this pace, total sales for 2011 will amount to about 90,000 properties, making 2011 the second best year in the history of Toronto sales, surpassed only by the 93,193 properties sold in 2007.

As occurred in July, the number of new listings that came to market in August exceeded the number that came to market in August 2010. Although 12,509 properties came to market, this number is historically low. Last August only 10,488 properties were added to the available inventory, a number so low it fuelled a strong seller driven fall market in 2010. Even though this August’s new inventory of houses for sale exceeded that of August 2010 by 20 percent, at the end of August there were only 17,258 available properties for sale, substantially less than the 19,563 available at the end of August 2010. This means that heading into the fall months the Toronto resale market remains a seller’s market, with buyers forced to compete for well located, attractively priced properties.

The average days on market for properties rose from 26 days in July to 27 days in August. In August 2010 the average days on market was 36 days. It is interesting to note that days on market has been edging up, from 24 days in June, to 26 days in July, and now 27 days in August. Although August’s pace of sales is extremely rapid, it has slowed from the spring market, and it may be signaling that although buyers are still committed to purchasing, they may be a little more deliberate in their decision making. This is also evident in some of the most active districts, (Riverdale, Leslieville, the Beaches) where earlier in 2011 days on market averaged less than 15 days, and in August were closer to 20. Still exceptionally fast, yet slower than earlier months in 2011.

In August the average sale price for all properties sold came in at $451,663. In August 2010 it was $411,012. Although this represents a 10 percent increase, August’s average sale price was the third monthly decline in monthly average sale prices. In May the average sale price came in at $485,520: the highest in the history of Toronto Real Estate Board record keeping. In June it trailed off to $476,371, to $459,122 in July, and $451,663 in August. It would appear that sales of properties having a value of less than $500,000 dominate the market. Of the 7,542 total number of reported sales, 6,228 had a value of less than $500,000.

Although Toronto’s resale market remains strong, it can not remain completely immune from the economic problems being experienced in many parts of the world. The United States is precariously close to entering a second recession in two years. The Euro zone, awash in debt, is struggling to keep itself together, and in the face of these economic difficulties, the equity markets have become totally unpredictable. If these global economic problems continue unabated they no doubt will negatively impact the Toronto market place. The decline in average sale prices may be an early indication that this is already happening. Although sales remain strong, they are concentrated at price points below $500,000, a egment of the market that is less concerned about global economies and stock markets.