Monthly Archives: November, 2008

November 21, 2008 eNewsletter

November 21st, 2008 Posted by eNewsletter, Market Commentary No Comment yet

Crunching the numbers…again

Most of you received my lengthy note about what the actual numbers say about the Toronto Real Estate market. There has definitely been a change in the overall market, but the annual average is still close to last year – up a bit here, down a bit there. The bottom line is that it’s now a buyer’s market, but the sky isn’t falling. Please call any time to talk about this in more detail, and/or email me if you didn’t get the note and I’ll be happy to forward you a copy.

Help a friend – refer to us!

In today’s volatile real estate market, we can’t over-stress how important it is to have a great agent – or in our case, 2 great agents! We all know that we are now in a buyer’s market; buyers need a strong negotiator to save them money and get them the best terms possible. For sellers, home prep and marketing are more important than ever. Emily’s expertise in that area will give them a unique edge. Also, a key characteristic of this market is a longer sell cycle. It’s important to maintain an active profile in the market; that’s why we don’t quit ’til the home is sold!
If your friends or family are planning to buy or sell in this market, put them in good hands – call us today!

Aviation in Canada: The Pioneer Decades

Many of you know that my dad is a book publisher. With over 30 titles, CANAV Books is Canada’s aviation heritage publisher. In honour of the 100th anniversary of flight in Canada, CANAV is producing a 3 volume tribute to the people, aircraft, and institutions of a uniquely Canadian story. Visit the Canav Books web site for more information about Aviation in Canada: The Pioneer Decades – and loads of other great titles. You can also ‘Like’ CANAV’s Facebook Fan Page

November 2008 eNewsletter – Crunching the Numbers on the Toronto Real Estate Market

November 14th, 2008 Posted by eNewsletter, Market Commentary No Comment yet

With all the noise out there, it’s hard to know what the Toronto real estate market is really doing, isn’t it? I’ve been telling people that it’s not as bad as the media says it is, and the numbers I just crunched basically support that. Naturally, some areas are doing better – or worse – than others. However, the handful of districts that I picked include where most of you live.

As you can see in the charts below, although the month-over-month numbers for October ’08 vs. October ’07 are down in some districts – by a lot in some areas like C03 and W01 – both the average and median prices year-to-date in ’08 are still higher in almost all sampled districts than the ’07 annual average and median. City-wide, the volume of transactions is way down; it’s no surprise that prices have drifted downwards, too. Notably, C03 and W01 are areas where the sales activity is roughly half of what it was last year. By contrast, in E02 (the Beach) the sales activity is roughly 85% of last year’s pace, and prices have remained stronger. This is also true in W12, where the median price (first-timer range) is up almost 14% from this time last year – and where there’s no City of Toronto Land Transfer Tax….

Also, I believe that the city-wide average is skewed by very high-priced sales. For example, in October of ’07 there were 252 sales for over $1,000,000. This October, there were only 77. Looking at all sales over $750,000, that segment accounted for 6.3% of transactions in October of ’07, and just 3.4% in October of ’08. (Note: TREB only publishes those numbers by the month, not year-to-date, so I have to limit the comparison to just October. However, I’m sure you get the point!) High-value sales are down by almost half, which has a serious draw-down effect on the ‘average’ sale price. Thus the exciting headlines! However, most folks buy in a range of $300,000 to $600,000, and in that range prices are much more stable.

This reality applies not just to sale prices of individual homes, but to districts where the average price is very high. I believe that this explains why the median price in E01 (Leslieville, where the average and median prices are in the first- and second-time buyer range) has remained positive while prices in C03 (pricy territory) are down.

So, what does this mean to you, the ‘average citizen’? If you are a seller, you shouldn’t panic; well-priced houses are still selling at a fair market rate. It’s a tougher market, as we have basically completed the transition from a seller’s market to a buyer’s market. Be prepared, be realistic, and be competitive. It’s not a market in which you should reach for the stars; your objective should be to sell at a reasonable price; if that means pricing for less than your neighbour sold, so be it. Keep in mind that you will probably also be buying in this market, so you’ll get some wealth protection there.

If you are a buyer, don’t get too cocky. There are some deals out there – indeed, some sellers are putting fire-sale prices on their houses. However, there are still enough buyers out there to generate the odd bidding war, as we’ve seen in a few cases recently. If you are trying to buy at the bottom of the market, you sure don’t have to rush out and buy today. However, timing the bottom of any market is a difficult thing to do. Once the financial markets get their ‘confidence’ back, I predict that the Toronto market will see a bit of a ‘bounce’, as those buyers who have been waiting to see what happens next decide to jump back in to real estate. Take advantage of this flat real estate market, and also take advantage of today’s cheap lending rates. Keep in mind that you will probably be taking out a standard 20 year mortgage. Today’s rates of around 5% are very low by historical standards, and whatever rate you get today will likely be much lower than the rate you pay towards the end of your mortgage… that’s a bit tricky to calculate, but the point is that money now is cheap; it may not be so cheap in the future. Thus, buying sooner rather than later still makes sense. In this climate you can take your time, think it over, and then make a conditional offer in most cases.

Toronto is definitely in difficult times – with high and rising city taxes adding to a difficult environment. However, we haven’t seen big job losses yet, interest rates are still low, and our economy will probably not tank like some U.S. cities. As I have said before, real estate is still a good investment compared to your other options. Besides, we all need somewhere to live! J By the way, the last time October sales were down around 5000 transactions was in 2001; at that time the average price for a house in Toronto was $251,479!

The charts don’t fit here; please email me if you would like to see them! 🙂