August 2013 Market Review & Getting Geared up for the Fall Market!

Yesterday (Sept.5th) TREB released the monthly sales stats for August. Following a busier-than-usual July, August sales were up 21% to 7,569 residential transactions (compared to 6,249 sales in August 2012). The average price also continues to rise, up 5.5% year-over-year. Of note, the Composite Home Index, which weights by type of house (because a big detached house will sell for a higher average price than a small row house), was up a somewhat more manageable 3.7%. Both numbers are well within my comfort zone, vis-a-vis long-term affordability.

Once again, condo sales caught my eye – they were up 21.6% over August 2012. The average sale price of a condo in the 416 was up 2.3% over last year, to $357,572. Over a shorter time-frame, that’s up from $342,847 at the end of 2012, a 4.3% increase that would take into account the December doldrums. It may be too soon to say for sure, but I think it’s looking more and more like The Big Condo Scare of 2012-2013 is over. 

As I noted in my July report, the market picks up significantly in the fall – more listings and more sales. It’s just the way the Toronto real estate market works – busy spring and fall, quieter summer and winter. This September is already heating up. If you are in the market, you have probably noticed it: there are more listings worth seeing this week than there were last week, and/or more prospective buyers touring through your house. It will continue like this until the end of October, perhaps extending into November (which is a bit of a wildcard – there could be anywhere in a range of 6000 to 8000 sales that month, which is a pretty big range).

A partial driver of this fall’s market will be the pending expiry of the 2.99% mortgage pre-approvals, which will mostly be done by the end of October: buyers will look to secure a purchase soon, before they lose that rate. The big lenders (i.e. the banks) have pushed up their mortgage rates over the last month or so, and are in the 3.5% range for a best-case, five-year fixed rate mortgage. If you have great credit, you can probably get something close to 2.5% on a variable rate mortgage, but it’s getting harder.

The relatively busy summer that we just had is a reflection of the ongoing, strong demand for real estate in Toronto. With more listings hitting the market over the coming weeks and months, we should all get ready for a busy, and possibly long, fall market. If you want to buy or sell this year, call me and let’s get to work.

No Comments

Sorry, the comment form is closed at this time.