June 2010 – Market Notes
Here is my latest report on the Toronto residential real estate market’s activity:
Sales: Sales are down, as usual when heading into the summer months, with 9,470 properties changing hands last month, versus a similar 9,589 the year previous. This number is not likely correlated to the slumpwe felt in early 2009, and so represents a reasonable market volume. I expect the market prices will likely stay level into summer with buyer confidence diminishing (perhaps unjustly) in the face of regulatory changes, such as the ‘new’ mortgages rules and HST implementation, and seller motivation staying stable. The effect will be a more balanced, buyer-friendly environment, and longer marketing periods (days on the market), which we are certainly already seeing.
New Listings: May also saw 18,940 new listings hit the market, up 38% (!) from the number listed in 2009. The continued high volume of new listings from April into May has assured that we are definitely heading further into a buyers’ market. The sudden incursion of huge seller volume has certainly stabilized the market. Look for prices to languish through the summer and possibly fall, with savvy buyers finally finding really hot deals again… though I wouldn’t expect them to drop too much more in the near future. Buy now or in the coming months for good deals and great inventory.
Active Listings: Active listings (total single family homes currently on the market) are only up 18% year-over-year, with 25,414 properties on the market last month, meaning that the new wave of sellers has more than completely balanced the market. The sellers have come to the table in droves, but buyer confidence is (perhaps unjustly) low. It’s a great time to begin surfing the listings and snatching up deals, which is what I’m personally doing with my portfolio and that of my investor clients. Decisive action when the market is uncertain pays big dividends for those who have access to the best/most information.
Days on the Market: The trend is still continuing toward fast sales as well, generally benefiting sellers, with properties taking on average far less time on the market to sell, down from 35 days to only 22 days (!) this year. You are encouraged to remember that this number represents the time until deals are firm and reported, and often includes a conditional sold period of up to 2 weeks. Consequently, these properties are effectively off the market much sooner. This is an unbelievably short time for properties to sell, on average. Buyers will still need to be very quick to snatch great properties in the sub-$400K market, which is evidenced on the street by many disappointed shoppers arriving to the table too late. Above $400K, property trade times have noticeably cooled, however vigilance will be needed to get ‘the good ones’.
Price: Finally, the median price of homes in the GTA in May was $376,750, up from $337,000 in the same month of 2009, with detached homes trading at a premium, priced at $464,000 last month median value. As predicted, the price versus last month has virtually leveled off.
Often, the best advice is: When nobody’s buying… buy! It’s a great way to get higher value and more blue-chip product than you could in a hyper-competitive market., and you’ll be happy when you’re holding those properties in 5 years, believe me. This summer and fall will be a great time to expand your portfolio with good opportunities become more accessible.
Tell your friends! They’ll thank you. Call me if you’re interested in learning more about buying or selling real estate.
Until next time,
Shaun Nilsson
1-888-712-7888
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