February 2014 Market Review
Cold weather is often an obstacle in real estate – especially when there’s snow, too. That seems to have been a factor in the February sales numbers, but more on the supply side than the demand side. There were 2.1% more sales in February, 2014 than February 2013, reflecting continued strong demand. At the same time, however, there were 1% fewer new listings posted to the MLS, and a year-over-year decline of 12.1% in total active listings – and that after a 16.6% decline in January. So, the story continues to be a shortage of supply coupled with continued strong demand, which is driving prices in Toronto up. The amount of the increase varies by type, but overall the average price increase was 8.6% year-over-year.
The reason I mention the weather is that sellers always want to put their best foot forward, which often means featuring the gardens and/or landscaping. If it’s too cold and snowy outside sellers will sometimes choose to wait (if they can). With a late spring this year, we are experiencing a weather-related delay to new listings. That, of course, adds to the on-going frustration felt by would-be buyers.
Of course, the weather is not as much of an issue for condo sellers in the 416. That market continues to steam along. After a sales (volume) increase of 7.4% and a price increase of 7.6% in January, February saw a further sales increase of 9.6% and a price increase of 6%. Buyers continue to defy the doom-sayers by making purchasing decisions in their own best interest, and not based on the fear-mongering of the talking heads. The downtown lifestyle is its own reward, and with house prices escalating more rapidly than condo prices, the decision to buy (and sometimes hold) a condo can be an easy one.
The outlook for March is basically more of the same: lots of buyers, not enough listings, and cold weather. 🙁 By the end of the month, however, we will see warmer weather, and with it I’m pretty sure we’ll see more listings. The buying will continue to be a battle, though, as lots of folks try to write their purchase before the latest round of mortgage rules (higher mortgage insurance premiums) kick in. I don’t view that as a large factor, but it’s there.
The bottom line is that if you are a seller, consider getting on the market now while low supply favours your odds; if you are a buyer, sharpen your pencil and gird for battle! 😉 Or, consider buying in a slightly less competitive part of the city ….