May 2010 – Market Report
Here is my latest report on the Toronto residential market’s activity:
Sales: Sales are up again, with 10,898 properties changing hands last month, versus only 8,107 the year previous. This is the first month where that number is not likely correlated to the slump we felt in early 2009. That 34% positive change is actually indicative of the beginning of a buyers’ market, and may begin to have temporary cooling effects on value appreciation. I expect the market will likely 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).
New Listings: April also saw 20,683 new listings hit the market, up 59% (!) from the number listed in 2009. The continued high volume of new listings from March into April has assured that we are definitely heading into a buyers’ market. The sudden incursion of huge seller volume has stabilized the market like water stabilizes a fire. Look for prices to languish through the summer and possibly fall, with savvy buyers finally finding really hot deals again.
Active Listings: Active listings (total single family homes currently on the market) are only down -2% year-over-year, with 22,951 properties on the market last month, meaning that the new wave of sellers has likely 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 pay big dividends for those who have access to the best/most information.
Days on the Market: The trend is continuing toward faster sales as well, generally benefiting sellers, with properties taking on average half of the time on the market to sell, down from 37 days to only 21 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 street level by many disappointed shoppers arriving to the table too late. Above $400K, property trade times have noticeably cooled.
Price: Finally, the median price of homes in the GTA in April was $373,000, up from $330,000 in the same month of 2009, with detached homes trading at a premium, priced at $462,000 last month median value. Let’s see if the trend stays up month-over-month by June’s Market Notes…
Real estate, contrary to HGTV’s programming line-up, is not generally a short-term investment. In times like these, you’ll want to average in to the real estate market and take advantage of slumping prices. 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. you’ll be happy when you’re holding those properties in 5 years, believe me.
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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