Snow Kidding!! Toronto 2008 Real Estate Market Sales In Deep Freeze
March 8th, 2008 Categories: Market Reports, News Wire
As I begin to write, snow falls silently around me. Well, I’m assuming it’s falling silently because the anguished howls of my colleagues are pretty much drowning out everything else.
A winter storm watch is in effect, and we are bracing for heavy snow to continue well into Saturday evening. Yes, it looks like the Toronto real estate market is in for yet another weekend of cancelled showings, late arrivals at appointments and frustrated buyers, sellers and real estate agents.
What a difference a year makes! Last year Toronto experienced its second lowest snowfall on record, with just 60 cm. This year we are on track to smash the record for most snow with six weeks to go and only 30 cm of snow needed to fall. The odds are looking mighty fine.
Toronto Real Estate Sales Drop
Like The Temperature
The Toronto real estate market posted a strong performance for January 2008. However, the February 2008 market experienced declines in both sales and inventory as compared to last year. According to the Toronto Real Estate Board (TREB), 6,015 resale transactions took place last month, down 14% in the City of Toronto and down 9% in the 905 areas compared to February 2007. Inventory decreased 7% compared to last year, which indicates that although sales were down, there is not an over-supply of homes on the market.
Factors Affecting
Toronto Real Estate Performance
What happened? Is the Toronto real estate market on a downward slide? Well, to gain perspective on current market conditions a number of factors must be taken into consideration. Here’s my take on February’s market performance in a snowball nutshell.
To begin, one month does not constitute a market trend. Trends emerge over time and we’ll just have to bide ours to see what the market trend is going to be this year.
The extreme weather we have experienced this winter has no doubt had an impact on market performance, both sales and inventory. Guess what?? When it’s hard to get around Toronto due to heavy snow, it’s hard to sell real estate! And many sellers have elected to delay putting their homes on the market at just the time when buyers can’t get out to see them.
I never thought I would lust after a snow plow, but it’s just been that kind of a winter. I’ve had clients offer to pick me up if I can walk out of the neighbourhood when they realize I simply can’t get out of my driveway, let alone off the street.
Some believe that the new Toronto Municipal Land Transfer Tax (in effect as of February 1) has had a negative impact, referencing the gap in sales (14% drop in the City of Toronto versus the 9% drop in 905 areas) as proof. Once again, it is too early to confirm that this is the case.
Keep in mind that many buyers scooped up inventory in order to beat the tax. Of course, that makes financial sense. But for those who could not find suitable homes, I am anticipating they will be in the Toronto real estate market again once the weather improves, not dropping out altogether or fleeing to the outlying Regions.
Toronto Real Estate
Spring Market Forecast
It’s about two weeks to spring, dare we dream. The hardware and handyman stores are setting up their display floors for summer, because they are sold out of snow shovels, snow blowers and ground salt.
Given our extreme winter, I believe there is pent-up interest in buying and selling. Actually there’s pent-up interest in just getting out of the house. Add to that a 50 basis point cut by the Bank of Canada to the key overnight interest rate this week, which is anticipated to give a boost to the Toronto spring market.
Look for better numbers this spring.
Related Must Read:
Toronto Mass Exodus To Burbs May Be Overstated, Find Out Why!
[…] February Market Update: Snow Kidding!! Toronto Real Estate Market Sales in Deep Freeze […]