Posts tagged " Average price "

Market Review – June 2017

July 7th, 2017 Posted by Market Review No Comment yet

The Toronto Real Estate market continued to moderate in June. The first point to note is that the average sale price was up 6.3% over June, 2016. Somehow, TREB’s HPI was up 25.3%, which may indicate that the unweighted average was brought down by a higher proportion of sales at the lower end of the market (e.g. condos: in June 2016 about 24% of sales were condos; last month is was closer to 30%). Over the last 12 months, the average price of a detached house was up about 10.2%, and the average price of a condo was up about 23%.

Of course, the louder news is that prices are down from earlier in the year. That’s no surprise, given the severity of the price spike in the first quarter – and, again, it’s a good thing. The market cannot sustain price increases in the 20-30% range. A bit of a pull-back was in order. As for the causes, who knows? Some speculate that it’s because of the 15% foreign buyers tax. Foreign buyers were such a small part of the market (maybe in the range of 5%…?) that it’s hard to say if enough of them have backed out of the market to have a measurable impact. Maybe it’s just buyers taking stock and getting the new lay of the land before proceeding. Or, maybe it’s just the usual spring surge in listings taking the pressure off price escalation. Either way, the market has been unsettled for a few months.

Still, it has been good for buyers – although fewer buyers took advantage of these more favourable conditions. The number of sales was down 37.3% from 2016, to just 7974 (and keep in mind that year-over-year the average sale price was up 6.3%). Those buyers had greater selection: the number of new listings was up 15.9% and the total number of available listings at the end of the month (19,680) was up 59.6%. For reference, the number of available listings in June 2007 was 21,789 – and that was down from 25,393 the year before! The current supply is up over last year, but we are still well below historical supply levels.

The market is not “correcting” in the sense that prices are going to go down below previous years. It’s leveling out. *BUT* these conditions won’t last. The Canadian economy is strong, and job creation is at its quickest pace since 2010. With interest rates set to rise, buyers will want to move quickly to make a purchase and secure as low an interest rate as possible. That’s going to fuel a surge in buying. What that will do to prices remains to be seen. Getting back to 5-10% annual increases would be great – healthy, great for investing, but also sustainable.

I think that sellers should hedge their bets and try to sell into this summer market. Things are going to pick up soon, and you don’t want to miss your buyer. Sure, prices may firm up through the second half of the year, but we’ve seen the top prices for 2017 already. Whatever we see for the rest of this year will be up from last year, but probably not by much. And buyers really should get out there and make their purchase ASAP. Whatever prices do, I doubt that the selection will get much better than it is now. The best time to buy is when nobody else is (or few others are) buying – that’s when you can make your best purchase. Lock in a great rate before they start rising.

The bottom line is: don’t miss your chance!

Market Review – May 2017: Double-counting of ‘new listings’ confounds data

June 16th, 2017 Posted by Blog, Market Review No Comment yet

Much is being made (e.g. in the media) about the ‘decline’ in sales in Toronto. As I have been saying (writing) for years, it’s one thing for the pace or volume of sales to decline, and another for prices to decline.

It’s true that the volume of sales in May 2017 was lower than sales in 2016. That said, 10,196 transactions is typical for a busy month in the spring market. The number of sales in May 2016 was 12,931, an all-time record for that month. So, we saw fewer sales than the record set last May. Do we have to set a record every month?! I don’t think so.

Also, the average price in May 2017 was $863,910, up 14.9% – or about $112,000 – still a very high increase. It was down from April (which was basically the same as March) because the market was so crazy in the first quarter, and that drove prices up quite dramatically. I’m glad to see that those super-high price increases are behind us.

Much is also being made of the increase in the number of new listings. As noted in the headline, that number is faulty: TREB has double-counted (and in some cases triple-counted) some new listings. Here’s how: a new listing is posted with an eye-catching price. The home-owner wants competition that will drive up that price. Then, due to the slowing activity that we’ve seen in the last six-to-eight weeks, ‘offer night’ comes and goes without a sale. The Realtor cancels the existing listing and posts a new listing with a higher price. TREB (through no fault of its own) can’t yet track that, so that property has appeared twice in the system and gets counted twice. You can imagine that this could easily happen a couple of times with the same property, and it happens all the time across the city. There could be hundreds, if not thousands, of double-counted properties in that “New Listings” number. Clearly, it’s not what it seems.

The better number to track is Active listings, which hit 18,477 last month, up 42.9% over May 2016. This is a good thing! The market has been trapped in a low supply situation for years, and if a bunch of new listings can take off some of the pressure, that would be great. Ten years ago, in May 2007, TREB reported  23,739 active listings (which was down from 26,220 the year before). The city population is higher now, and we are still nowhere near that volume of available listings for all the eager buyers out there. Why would anybody start ringing the alarm bells in conditions like this? My guess is sensationalism. Fear sells, doesn’t it? :/

The supply issue is perhaps more easily understood if one looks at the number of active listings added to sales. That number would provide a sum of the real estate activity for the month. In May 2007 (which I chose as a nice, round ten years ago), there were 23,739 active listings and 11,146 sales, which adds up to 34,885.

Last month there were only 18,477 active listings left at the end of the month and 10,196 sales, which adds up to 28,673, only about 82% of the activity recorded in 2007. With a rising population, solid economy, good job growth and continued low interest rates, we still have less real estate activity now than we did ten years ago. In this supply-constrained, competitive environment, what would cause a correction? There’s certainly a fear factor infecting the market these days, but underneath all that is the relentless supply shortage, and that should absolutely preclude a correction (beyond the simple re-balancing we’ve seen recently).

By the way, looking at the 11,146 sales in May 2007, from that ‘selection’ of 34,885, it’s clear that buyers had a lot more choice then; prices were up a manageable 5% that month. That was a strong market, and we would be lucky if our supply were to increase steadily over the next few months to get us back to that level.


April 2017 Market Review

May 8th, 2017 Posted by Blog, Market Review No Comment yet

April was another busy month in the Toronto real estate market. New listings finally started to appear (21,630 new listings for the month, up 33.6% over April 2016) giving buyers more choice. Coupled with 11,630 sales for the month (down 3.3% from the 12,016 recorded in April 2016), that allowed available listings to edge up 3% ,to 12,926 by the end of the month.

Price pressure remained in place, though, with the average sale price up 24.5% to $920,791. Note that the average sale price in March was $916,567, meaning prices remained essentially flat month-to-month. So, although we saw another big year-over-year price, this could be a sign that prices are leveling out, which will come as a relief to buyers.

The condo segment in the 416 had an impressive month. Sales volume was up a modest 8%, but prices soared 32.3%, keeping pace with last month’s increase.

The long-awaited increase in the supply of available listings is great news for the market, but it still leaves us far from historical levels. For example, in April, 2007 TREB reported 22,829 available listings, almost double the current level. The average Days on Market (i.e. how long the average listing took to sell) was around 30 days. Last month it was just 9, indicating how short-lived our supply really is. If we are lucky, we’ll get a couple of months of increasing supply, which should bring some balance to the market.

Right now it looks like the price increases are locked in, but it’s important for sellers to note that the market is not the same as it was in Jan-Feb-March. The new supply is taking some of the heat off buyers, meaning they don’t have to put everything on the line for every house that they see. So, while we are still seeing multiple offers on a lot of houses, we won’t get that for every single listing. Marketing – especially pricing – is more important than ever. But, we’ve seen this before; almost every spring, in fact! We make the adjustment, and move on.

The bottom line is that it’s still a great time to sell, and an even better time to buy.




March 2017 Market Review

April 10th, 2017 Posted by Market Review No Comment yet

The Toronto real estate market blasted through March, 2017. We saw a decent increase in new listings (17,051, up 15.2%), which we expect this time of year, but sales once again gobbled ’em up. There were 12,077 transactions, an increase of 17.7% over March 2016. By the end of the month, only 7,865 listings were left, 35.2% fewer than the same time last year.

This ongoing supply-demand crunch once again drove prices up. The average sale price (all types) hit $916,567 ($688,011 in March, 2016), up 33.2% year-over-year.

Condos in the 416 continued to surge too, with sales up 29% and the average price up 32%, to $550,299. The average price for a townhouse – which can be a bridge between condo apartments and houses – was up 22%, to $761,128. Clearly, there are options for buyers who can’t (yet) afford a semi or fully detached house in Toronto, and the increasing sales numbers in these segments indicate that more and more buyers are going that route.

The biggest numbers are in the fully detached segment, where the average sale price hit $1,561,780! TREB’s HPI, which takes into account differences among housing types, and tries to smooth out the averages, was up 28.6%, slightly lower than the overall average. Still, these are all hefty increases.

The next few months are going to be interesting. We’ll have to wait and see how many new listings come out for the spring market, and whether or not there will be enough to satisfy demand and take the pressure off prices. Sky-high pricing usually brings sellers to market. Again, the lack of options for sellers – i.e. where will they go after they sell? – remains a problem, but anybody motivated to ‘cash out’ will find a way. This market needs that, so I’m not saying that we’ll see a flood of listings and a subsequent correction. At this point, I’m just hoping for something to help ease that pressure.

I’m a big fan of Toronto real estate as an investment – that’s not going to change – but 33% annual increases are not sustainable. Maybe buyers will back off, and do their part to take control of the market (but don’t ask me where they will live while waiting for the market to cool). Of course, even lower price increases won’t likely go below double digits, and real estate should always be a medium-to-long-term investment, so it’s probably still better to buy sooner than later….

May 2016 Market Review

June 8th, 2016 Posted by Blog, Market Review No Comment yet

May was another blistering month in the Toronto real estate market. TREB reported 12,870 sales, up 10.6% over May 2015, and setting the record for that month. Once again, new listings declined, from 18,611 in May 2015 to 17,412, a drop of 6.4%. Hot sales and fewer new listings cut the total number of active listings from 18,585 last year to just 12,931, a huge drop of 30.4%.

That combination is the primary cause of the intense competition among buyers, and contributed to further price increases. The average sale price last month was $751,908, up 15.7% over $649,648 recorded last May. TREB’s HPI was up by roughly the same amount, 15%.

The 416 condo market also had a booming month. Sales increased by 21.7% year-over-year, while the average price was up a more modest 5%. There’s more selection in the condo segment, and although prices keep increasing, it’s at a much more manageable rate for first-time buyers. If you have your heart set on a house for your first purchase, you might want to consider a condo as a way to get your foot in to the real estate market….

Traditionally, the spring market goes ’til some time in June, and things definitely slow down after the July long weekend. In recent years, however, with the on-going supply shortage and teeming buyers, the summer months have remained competitive. It remains to be seen what exactly will happen this year, but I’m expecting stronger than usual activity in July, due to pent-up buying demand. I think that the key to success this summer will be to stay active!

January 2016 Market Review

February 4th, 2016 Posted by Market Review, Uncategorized No Comment yet

January got 2016 off to a quick start. In its monthly Market Watch, TREB has reported 4,672 sales for the month, up 8.2% over January 2015. At a time of constrained supply – both generally, over the last few years, and seasonally – prices shot up 14.1% year-over-year, to $631,092. That was apparently due, at least in part, to more sales of pricier houses outside the GTA. By comparison, TREB’s HPI, which tries to smooth out the average by accounting for type of houses sold, was up a more modest – but still significant – 11.2%.

To illustrate the point about supply, there were just 9,966 active listings last month, compared to 11,600 in Jan.15. That’s a drop of 14.1%. Ten years ago, in January 2006, there were 18,073 active listings (a 3% increase from January 2005), and 4,587 sales (a 10% year-over-year increase). That’s almost double the current supply, and there were fewer sales! It’s no wonder that buyers today are feeling the pressure….

In the condo segment, sales volume in the 416 increased 11.6% over Jan.15 and prices jumped an interesting 8.6%. I say that because we’ve seen decent sales volume in condos over the last year or so, but usually not the same kind of price increases that houses have shown. It will be interesting to see if this keeps up….

In general, I think that the ‘spring market’ will get going sooner rather than later. If you are a buyer, keep your eyes peeled and when we spot something, be ready to pounce! If you are planning to sell in the first half of this year, you should get to work on/around the house ASAP; it’s better to be ready early!

By the way, my Exclusive listing at 58 Brookmount Rd will hit the MLS on Feb 16th. Call me if you would like to see it before then.



October 2015 Market Review

November 9th, 2015 Posted by Market Review No Comment yet

TREB reported 8,804 sales through the Toronto MLS in October, 3.4% more sales than October 2014, setting another monthly sales record. By now it should come as no surprise to anybody that new records are set almost every month. The economy is strong and the population of Toronto continues to grow, two factors that will obviously contribute to demand for housing.

That demand is faced with tight supply. Both new listings (-0.4% to 13,339) and total available listings (-7.5% to 16,180) declined last month. Although we usually see a surge in listings for the fall market, that just hasn’t happened to the degree we used to see pre-recession.

For example, TREB’s Market Watch for October, 2007 showed 13,363 new listings for the month, and 20,626 total available listings (which, by the way, was down from 24,367 in October 2006, 22,875 in October 2005 and 23,353 in October 2004 – all well above today’s inventory). That’s a decline of 20% compared to 2007, and that seriously reduces choice for buyers – and increases the likelihood that buyers will have to compete for a house, which in turn drives up prices.

The average sale price in the 416 increased 7.3 per cent over October of last year, to $630,876. TREB’s HPI, which is designed to properly weight sales by type (because a fully detached house will usually sell for more than a semi-detached) was up 10.3%. Strong sales means serious price increases.

The condo market continues to chug along. Sales in the 416 were up by 9.7% over the previous year; average price increased by 4.2%.

The fall market is still underway, and will go (as much as it can, given the shortage of listings) probably through November. There’s still time to get your house on the market, and if you are a buyer there’s a decent chance you will find what you are looking for before the end of the year.


April 2015 Market Review

May 6th, 2015 Posted by Market Review No Comment yet

The Toronto Real Estate Board has reported 11,303 sales for April, 2015 – the most ever for the month of April. It’s an increase of 17% over the 9,660 sales in April 2014. The number of new listings increased by only 5%. The fast pace of sales amid fewer new listings resulted in a decline in the number of active (available listings) of 10.1%, to just 17,182 (from 19,118 last April). That pressure on supply led to an average sale price increase of 10% year-over-year, to $635,932.

I think it’s worth noting that the average sale price includes all the high-end, detached houses, and some parts of the 905. Averages can be skewed – even by a handful of outliers. To give some perspective, here’s how the average sale prices break down by type in the 416 (City of Toronto):

Fully detached $1,056,114 (+9.2%)

Semi-detached $727,875 (+3.5%)

Town (row) house $551,231 (+10.3%)

Condo $407,612 (+5.8%)

Price increases in the 905 were higher, on a percentage basis, in all but the townhouse category, and that would have drawn up the percentage increase, too. Obviously, the average doesn’t tell the whole story. I hope that the above numbers look a little less intimidating!

I’ve been mentioning the condo segment for some time now. That 5.8% increase is healthy, and easily sustainable in a low interest rate, low inflation environment. Condos are a good buy.

The Toronto real estate market is strong, and will remain strong through the year. As I always say: anything can happen (even an NDP government in Alberta!), but there’s nothing on the horizon to imply trouble for the market. The main pressure in recent years has been coming from buyers, and that’s not about to change. That means it’s a great time to sell (downsize, divest, relocate out of town). If you are planning to sell, call me and let’s get to work.

May 2014 Market Review

June 24th, 2014 Posted by Market Review No Comment yet

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.



February 2014 Market Review

March 6th, 2014 Posted by Market Review No Comment yet

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 ….