November-December 2012 Market Review
With the month of December being chock-a-block with seasonal activities (including a couple of birthdays in my family), I neglected to post about November market activity, so I’m combining November and December. 🙂
November was not a super-busy month. Sales activity (volume) added up to 5,793 units sold, down 16% from the previous year. Prices were up about 1.6%, which I read as basically flat. Of note, TREB’s Home Price Index, which compares like house types (thus minimizing the effect of having more or fewer million-plus sales to influence the average) was up 4.6%. That 4.6% is meant to be the more reliable indicator.
November is busier than December, but by about half-way through, attention starts to shift to the rapidly approaching holiday season, and the real estate market starts to tail off. That said, I took a new listing in the last week of November; it sold in 11 days!
Typically a quiet month, December saw 3,690 sales, down a fair bit from the 4,585 reported in December, 2011. However, the average sale price was up 6.5%, which is good – up enough to show some capital appreciation (after inflation), but not so much as to stretch affordability.
The number of active listings declined significantly from 18,311 to 13,241 in December. That’s most likely due to the season. While November saw 9,838 new listings, December had only 4,295 as many Torontonians turned their attention to Christmas, New Year’s Eve, etc. With the market slowing for the season, and with kids off school, some soon-to-be sellers keep their house off the MLS until the New Year. Plus, some un-sold houses simply go off the market for the month. This tightening of supply always means that the good houses that are on the market get plenty of serious attention from active buyers, so those listings sell (like 9 Gowan Ave). Overall, it puts a bit of pressure on the buyers!
TREB reported that the average sale price in Toronto was $497,298 in 2012, up about 7% from 2011. I’d say that stands in stark contrast to the (many, many) dire predictions for the Toronto real estate market produced by various prognosticators last year. (By contrast, I said this a year ago: “The market is ‘hot’, and will stay that way for the foreseeable future.” Read the whole post here.) I don’t feel like we are being bombarded with negative news now. Maybe those ‘experts’ are getting tired of being wrong. 😉
Watch for some houses that were taken off the market in December to be re-posted in the coming weeks. Other houses, perhaps belonging to folks who bought in late November or December, will be brand new listings. Still others will be just a part of the continuous cycle. Either way, we’ll see a gradual increase in the supply of available listings over the next few weeks and into the spring, when I expect things to really pick up.
If the public mood moves past the general negativity we’ve experienced in the last couple of years, we’ll be back to a strong real estate market in Toronto – which in my books means increased supply to help keep the pressure off prices. Interest rates aren’t going anywhere until the end of next year, maybe later. That will help with affordability in the short-to-medium term, and if the average Canadian heeds the warnings of the government and central bank and pays off some debt while debt is cheap, we’ll all be ready for the inevitable (and likely gradual) rate increases after that. In short, I’m expecting another good year for Toronto real estate.
By the way, check out my Facebook page, where I regularly post interesting bits of information, links, etc. The media, which loves the doom and gloom, has actually produced a few relatively balanced reports about the year ahead, some of which you’ll find there. Plus, if you are not already following me on Twitter, do it now!