Talk about a roller coaster! The results in June for the Toronto Real Estate Board (TREB) reported that over 10,955 properties sold (vs. 8,600 in June 2008). The results in June represent an all-time record for the Toronto Real Estate Board for this month, and represent the 7th consecutive month that the TREB unit sales have increased. For a comparison of 2009 to 2008 click here.
To refresh your memory, in June of last year TREB reported sales of 8,600. Following that, the Toronto real estate market took a gradual drop virtually every month until December when the TREB market bottomed out at 2,577 sales. After December, we saw a dramatic upturn in unit sales as every subsequent month has had a month-over-month increase of almost 30%. Look at the graph below representing the last 12 months to see the dramatic changes in the results before and after December.
Not surprisingly with this increase in sales, MLS® listing inventory levels are down substantially. In June, TREB reported 18,704 listings vs. 26,543 in June 2008, which represents a drop of approximately 30%. More significantly the time on market for inventory on hand dropped from an average of 3.1 months to only 1.7 months. This means that in June, the average property was on the market for approximately 7 weeks before it was sold vs.12 weeks in June 2008. This situation has resulted in multiple offers for well-priced properties, especially for listings under $500,000.
The most abundant inventories to choose from are the West districts of TREB with over 7,310 active listings. The East and North districts had a much smaller inventory level (3,964 and 4,516 respectively). Central Toronto - as is typically the case - had the lowest inventory levels, with only 2,914 listings.
For the first time in 2009, the average price of all types of properties (i.e. Condo Apartments, Detached Homes, Town Homes) exceeded the 2008 average prices. For example, the average selling price of a Condo Apartment in June was $283,505, vs. $276,342 in 2008, the first time in 2009 that the monthly average exceeded the previous year’s numbers. A similar phenomenon occurred in Detached Homes and Town Homes where the average price was $494,128 and $333,266 respectively. Click here to see a chart showing a comparison of the average prices for the last six months.
Central Toronto continues to be the most expensive district in the GTA, having an average sale price of $518,423 (all property types). North Toronto came in second with an average price of $434,392. The average prices for the West and East districts were $378,215 and $317,748 respectively. In all districts, the mean price exceeded the 2008 numbers.
So this begs the questions, is it still a good time to buy a property? Absolutely! Here’s why:
- The Mortgage rates are still at a phenomenally low level creating affordability levels, which we haven’t seen in years. Unfortunately these rates may not continue at this level for much longer. As the government continues to pump money into the economy, inflation will start to rear its ugly head, resulting in higher mortgage lending rates shortly thereafter.
- There are significant opportunities in the ‘move up’ and ‘upper end’ of the market to get some good buys. On the flip side, properties priced under half a million dollars, although in greater demand, are still affordable in comparison to prior years.
- The greatest opportunities to find an affordable property with the greatest amount of inventory are generally found in the West districts.
However, as we indicated last month, real estate is a personal decision. If you want to pick the best properties in your favourite market, stay tuned for next month’s article.
Andrew C. Zsolt, Ca, Mba, Fri, is the founder and Broker of Record of Coldwell Banker Terrequity Realty, Brokerage – the number one Coldwell Banker franchise real estate brokerage in Canada. Andrew has made appearances in The Globe & Mail as well as The Toronto Star as a notable real estate expert. You may contact Andrew via e-mail at azsolt@terrequity.com.
