May 2014 Market Review
May tends to be one of (if not the) busiest months of the real estate year. So, it’s no surprise that TREB reported May 2014 sales volume up 11.4% over May 2013, to 11,079 transactions – a new record for that month. Intense activity – and on-going competition (‘bidding wars’) – drove up the average price by 8.3%, to $585,204.
In a continuation of the issue that has plagued the Toronto real estate market since the recession, the number of listings declined year-over-year. New listings were down just 0.8%, to 18,931, but overall, total active listings declined by 8.8%, to 20,679 (all houses, condos, etc. in Toronto and the surrounding area). Strong demand in the face of tight supply is what has been driving prices up in Toronto – not speculation, not a ‘bubble’, just plain old supply-and-demand. And, for better or worse, there’s no obvious relief on the horizon. As I have been saying for years, this market is most likely to continue trending upwards for some time to come.
I think it’s worth mentioning that condo sales again increased (5.4% in the 416, 16.1% in the 905), as did prices (7.6% in the 416, to $401,809; and 4.8%, to $307,307 in the 905). That market remains a great outlet for buyers unable to crack the low-rise housing segment. Condos offer a great lifestyle, as well as a chance to build equity and take part in the capital appreciation offered by the investment. Although it likely costs more than renting (on a monthly basis) in the short term, it’s a great foot in the door to the real estate market.
June typically spells the end of the ‘spring market’. However, as I pointed out last month, we seem to have gotten off to a late start this year. After a brief lull for the Canada Day long weekend (it’s not *officially* a long weekend, but loads of people will make it one), the market will carry on through July, albeit perhaps somewhat less frantically. For my part, I have a few buyers who are hoping to make a purchase over the summer, and I hear that there are quite a few listings in the pipeline, so that should make for a good combination. The bottom line is that there will be continuing strong ‘spring market’ activity for the next month or so.