To start the year, I’m combining January and February into one review. 😉 Plus, I’ll make some comments about interest rates near the end.

January 2020 basically picked up where 2019 left off – busy! The pace of sales increased 15.4% (4,581 this January over 3,968 last January); at the same time, the number of new listings declined (again) to 7,836, from 9,456 last January. By the end of the month, there were just 7,772 listings available, down 35% from 11,962 last year! This now-familiar dynamic between the number of homes available and the number of sales caused the usual upwards price pressure: the average sale price hit $839,363, up 12.3% over the average for the same month last year (which was $747,175).

By the way, TRREB is now reporting seasonally adjusted, month-over-month changes in sales activity. I’m not sure if that will help with understanding the market – except to help identify when the spring and fall markets start and stop – but for the record, January sales were up 4.8% over December….

Condo sales in the 416 remain strong. Sales were up 9.7% and the average price was up 15%.

TRREB also noted that “the MLS® HPI Composite Benchmark price was up by 8.7 per cent compared to January 2019 – the highest annual rate of growth for the Benchmark since October 2017”. Detached houses and condos were the biggest contributors to the change in the weighted average.

February 2020 was also a big month. There were 7,256 residential sales in February, up a whopping 45% over February of 2019 – but, it’s important to note that February 2019 saw a 10-year record low for sales (just 4,982). The big sales increase was somewhat mitigated by 10,613 new listings, an increase of 7.9% over the same month last year. However, by the end of the month there were just 8,816 listings available, down 33.6% from last year. The resulting price pressure drove up the average sale price to $910,290, +16.7% over the February 2019 average of $779,791.

TRREB reported that the sales activity in February was up by 14.8% over January. This shows some momentum over the last few months, but that’s to be expected at this time of year. We’ll have to see how this month-to-month data develops as the year progresses before I decide how I feel about this new metric; I’m not sure how helpful it will be. For example, it’s reasonable to expect that the COVID-19 panic will slow down sales this month – but I’d bet anything that the market will surge back to balance when the fears blow over. So, the month-to-month data could end up being misleading to some….

Condos had another good month. Sales activity increased by 26.2% and the average price increased by 18%, to $722,675.

TRREB’s MLS® Home Price Index Composite Benchmark was up 10.2%. Townhouses had the smallest increase in price (10.5% – not exactly a ‘small increase’!) and condos had the largest increase in price.

Interest rates are dropping this week, partly due to the COVID-19 scare. (Rates are more directly related to bond prices, but the decline in bond prices may also be related to the COVID-19 scare….) If you got a mortgage last year or the year before, it may be worth speaking to your mortgage broker or bank and ask about the possibility of breaking your mortgage for a new one at the current rates. BEWARE OF THE PENALTIES! Don’t assume that today’s lower rates will make up for the cost of penalties – it depends upon who lent you the money, and what terms are in the mortgage. All I’m saying is that it’s something to consider/talk about. Contact me if you’d like to speak to one of my partners in the mortgage industry.

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!

As expected, December 2014 turned out to be a relatively busy month in the Toronto real estate market. The 4,446 transactions reported by TREB represents a 9.6% increase in sales volume over December 2013 – no mean feat in the face of 10.4% fewer available listings. That activity drove prices up 7% over the previous December, pushing the average sale price for the month to $556,602 (over $520,189 last year).

For the year 2014 TREB reported 92,867 sales, up 6.7% over 2013, but not quite enough to top 2007 – basically, just as I talked about last month. The average price in Toronto increase by 8.4%, to $566,726. (Note that the annual average is slightly higher than the monthly average for December. That type of small difference is not uncommon for the slower months. The months with the highest average prices in 2014 were May and October, which is fairly typical of the real estate market cycle.)

Regular readers will know that I have been tracking condo sales over the past year or so. In keeping with a fairly consistent pattern, condo sales in the 416 were up 16.1% over the previous December. The average price hit $387,612, up 5.4%. Despite lots of construction, there is no ‘glut’, and there has been no ‘crash’ – nor will there be. Condos represent a great starter home, and/or investment holding. That market ain’t going anywhere. (TREB will publish its quarterly Condo report soon, so I’ll add some details then.)

In terms of 2015, there are already loads of predictions out there. Naturally, most media outlets are (as usual) predicting something bad, but (as usual) I disagree with them. The Toronto real estate market is strong and stable – no matter what happens in Calgary or Vancouver – and will probably stay that way for some years to come. However, anything is possible, and this year has quite a number of interesting variables: the drop in oil prices (good news for most of us); the improving US economy (more good news); and possible movement in Canadian interest rates.

On that last note, it looks like rates will stay close to current levels through much of 2015, with possible smallish increases in the latter half of the year. It has been a good run of super-low rates, and that can’t last forever. However, rates will likely edge up in small increments over the span of a year or two. They won’t be jacked up suddenly; inflation is too low to warrant that. Of course, something could happen to stall or accelerate the increases, but at this point it’s reasonable to expect some kind of movement later this year, kicking of a period of increasing rates. Now would be a good time to look at your mortgage renewal, and/or get a pre-approval for your next purchase. (Get in touch with me if you need help with that.)

All in all, I expect that 2015 will be another busy year in Toronto real estate. Prices will continue to rise due to pressure from buyers. Sellers – who still have to present a fair product to the market, at a fair price – will stay in the driver’s seat. Whatever your move will be this year, I’d be happy to help you. Call or email me any time.

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 ….

Twenty-fourteen is shaping up to be another great year for the Toronto real estate market. As I have said many times before, Toronto is unlike other markets. It drives me nuts when people talk about the ‘Canadian real estate market’, as if trends in smaller cities and towns have anything to do with Toronto. Our economy is diverse and our population continues to grow, so there’s no mystery as to why residential real estate prices also keep growing. Of course it makes sense that the real estate market here is out-pacing many markets elsewhere in the country. How could it not?

Add to the picture this year the improving US and global economies. The jobs numbers that came out last week in Canada (net losses) and the US (weaker than expected growth) show that the ‘recovery’ is still, well, in recovery. However, there is a growing sense of inevitability that the US will finally show some upward momentum this year. Even Europe seems to have stumbled towards stability. As the American economy grows, so do Canadian exports, which will give a boost to our own mostly-stable, but slow-growing, economy. Once real growth kicks in we’ll be in for a few good years. (How many is anybody’s guess. This C.D. Howe report indicates that the pre-recession growth cycle was 16 years. We should be so lucky this time around!)

Another major factor this year is interest rates. I think that we are probably still on course for flat rates this year and into next. Even when rates do start to rise, they’ll most likely rise slowly, so as not to jolt the economy. We’ve got another few years of near-record low rates ahead of us. (My first mortgage, in 2001, was for 8.9% – more than double current rates – which was considered a great deal in those days. Perspective is important!)

The supply shortage that has been a feature of the Toronto market since late 2008/early 2009 has yet to ease. As a full-time, professional Realtor I spend a lot of time talking to other agents. As we start 2014 there is a continuing urgency among my colleagues to find homes for our buyer clients. The view ‘on the ground’ is that tight supply will continue to drive prices up, particularly for single family homes and small income properties. I believe that it’s safe to expect a 5-7% year-over-year increase in 2014.

On that latter note, specifically, I continue to encourage my clients, especially first-time buyers, to consider an income property. In the short term, the income will help you afford not only the purchase (assuming you live there, which is an important factor), but a decent lifestyle. If kids are in the plan, or even if you just want more privacy down the road, you can keep the income property and use the equity to move on at some point. Not surprisingly, though, duplexes and triplexes are in high demand/low supply. It’s not a slam dunk, but it’s definitely worth thinking about.

Mortgage rate tip: one of the big bank mortgage pros that we work with told a group of Realtors last week that he expects a mortgage rate ‘sale’ some time in February or March. It has happened in each of the last few years, so he thinks it will happen again. Watch for it, and if you are in the market, try to nail down an interest rate deal before the busy spring market. 

Today TREB released the sales statistics for September. As I noted recently, sales activity has been up significantly this year, and September continued that trend: sales volume was up 30% over September, 2012. At the same time, the number of both new and active (total) listings were down. That led inevitably to higher prices, which climbed 6.5% year-over-year. 

Interestingly, while the number of active listings in September (20,194) was higher than August (18,788), the number of sales was lower (7,411 sales in September after 7,569 in August). So, the seasonal increase in listings has begun, but not to the satisfaction of buyers. As I’ve said for years now, buyers make the best decisions for their circumstances (budget, location, etc.), and won’t over-pay for a property that doesn’t offer them the value they are looking for. Buyers are still ‘picky’ – and rightly so. The message to sellers? Properly prepare your property for sale (declutter, clean, complete minor repairs, paint, etc.), and price to market! Don’t just assume that because it’s a ‘hot’ market you’ll get your price.

As has been widely discussed, an important factor driving the real estate market is super low interest rates. We’ve known for some time that rates would stay low through 2014, and perhaps beyond. According to this article, one major Canadian bank expects low rates all the way to 2016. That’s good for home owners, investors, renovators, etc.

Overall, the key point is that there is still lots of pent up demand this year- just as there has been since the recession ended – and low interest rates to help keep prices affordable. October will be another strong month for sales and price appreciation. In fact, we could see the ‘fall market’ steam on through November – especially if the weather holds up. All in all, whether you want to buy or sell (or both), this fall is going to be a great time to do that. Call me now and let’s get started!

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.