Real Estate Trends Suggest Market Stabilizing

Greater Toronto Real Estate Agents Reported 4,120 Resale Housing Transactions in February

GTA home sales were down 32% in February compared with this time last year, but prices appear to be stabilizing, according to the Toronto Real Estate Board.

Toronto Real Estate Board Members reported 4,120 sales in February 2009 compared to 6,015 sales recorded in February 2008. The average home price was $361,305 last month compared to $382,048 during the same month last year.

“A considerable number of transactions continued to take place in February 2009. Motivated buyers and sellers, who were aware that market conditions changed over the past few months, were able to negotiate transactions acceptable to both parties,” said Toronto Real Estate Board President Maureen O’Neill.

On a month-over-month basis, sales and average price were above January levels of 2,670 and $343,632 respectively. The housing market is seasonal. Traditionally, in the first half of every year, sales and average price climb to their highest levels in late spring before trending lower from July onward.

Comment: We are now seeing the market come back to what we expected. The declines are slowing, or even reversing. Sure, February 2009 is down over the same period last year, but sales volume is up 54% over last month and prices have risen another 5%. Buyers are not going to see and major price drops, but there is still a good variety out there and more to choose from than last year. Lastly, days on market is heading down again, properties are selling faster and not sitting on the market for long anymore. So much for the crash, eh?

“While the economic downturn has had an impact, the GTA housing market is resting on a solid foundation. Current home prices and mortgage rates suggest that GTA homes have become more affordable on average,” according to Jason Mercer, the Toronto Real Estate Board’s Senior Manager of Market Analysis. “A greater number of home buyers could take advantage of this affordability once their positioning in the economy becomes more certain.”

Typically the spring real estate market tends to experience more activity and with the Canadian economy experiencing a period of low mortgage rates and strong immigration, this trend could continue. According to Statistics Canada, Canada welcomed 247,202 permanent residents in 2008, 70,000 more than in 1998, and well within the government’s planned range of 240,000 to 265,000 new permanent residents for 2009.

Comment: With prices starting to rise again, sales volume heading way up, days on market decreasing and very low mortgage rates – we are set to have a great spring market!

The Toronto Real Estate Board President pointed out that Greater Toronto Real Estate Agents are an integral part of the real estate transaction process. “TREB Members are uniquely positioned to help home buyers and sellers adapt to changing market conditions,” added Ms. O’Neill. “In addition, TREB continues to advocate public policies that do not threaten affordability but support home ownership in the GTA such as lower taxation and less regulation.”

Greater Toronto Realtors are passionate about their work. They adhere to a strict Code of Ethics and share a state-of-the-art Multiple Listing Service. Serving over 28,000 Members in the Greater Toronto Area, the Toronto Real Estate Board is Canada’s largest real estate board.

Better Sales: Toronto Real Estate Sales Hit 2,044 in Mid February

Greater Toronto Realtors reported 2,044 sales through the first 14 days of February, compared to 2,775 sales reported during the same period in 2008.

“While sales have been lower, the housing sector remains one of the pillars of the GTA economy,” said Toronto Real Estate Board President Maureen O’Neill. “Each existing home transaction generates, on average, more than $33,000 in spin-off spending on renovations and other housing-related items. This spin-off spending translates into jobs.”

“The City of Toronto needs to do its part to encourage homeownership by reducing the tax burden on existing and potential home owners,” said TREB President Maureen O’Neill. “To this end, Greater Toronto real estate agents are calling on the City to roll back the municipal land transfer tax. We presented our views to the City’s Budget Committee yesterday.”

The average home price in the GTA was $364,748 compared to $385,735 in mid-month February last year.

“It is interesting to note that while the average price was down, the annual rate of price decline slowed compared to the previous four months,” according to Jason Mercer, the Toronto Real Estate Board’s Senior Manager of Market Analysis. “If this trend continues into the spring, it could point towards average home prices leveling off between $360,000 and $370,000.”

Comment: For the first time in months, February 2009 compared to February 2008 is going to be the true test. This month, we aren’t comparing to previous months where there was abnormally high activity due to buyers who were trying to avoid a new tax. This month,  we’re FINALLY comparing apples to apples… and guess what …we are seeing very little difference.

Like me, fellow realtors are sharing the same setiment… the sky is NOT falling, the market is NOT collapsing. We are currently looking at only a minor 5% price drop… a drop that occurs over the past 12 months, comparing the beginning of February 2008 with the first have of February 2009. That is less than 0.05% per month. Or 0.0001% per day. So what, you say? Consider this… the stock market dropped 30-50% in only 3 months, in comparison.

Read this carefully. IMPORTANT: All the indicators suggest we are pretty much at the bottom now, so if you are thinking of buying, the next few months are going to be the best time. Once consumer confidence returns with the nice weather, everything will stabilize, interests rate will start to climb again, and we might even see prices edge upwards again. Visit my website, www.BlairArmstrong.com … send me a note or call me – let’s talk about finding your next home before the interest rates start to climb along side housing prices! ~Blair

For more information, contact Blair Armstrong at 416-301-0222

SOURCE: Toronto Real Estate Board