Got Gravol? Toronto Real Estate Market Sails Into Rough Waters
October 6th, 2008 Categories: Market Reports, News Wire
One of my favourite bike rides is along the Waterfront Trail, starting from the Boardwalk Pub (Ashbridge’s Bay) over to Humber Bay. It’s an easy 40 km ride, and what I like the most about the ride (other than no rolling hills!) is that at certain points you’re cycling right along the Lake.
There’s no mistaking Lake conditions; the weather can change so quickly as you spin along (is this why we always seem to be riding into the wind?). When conditions change, as they always do, and the water becomes rough, I’m glad I’m on my bike and not one of those tossed-about sailboats.
There’s no mistaking that conditions have also changed in the Toronto real estate market. The Toronto Real Estate Board (TREB) has just reported the September 2008 numbers. Let’s see what the message in the bottle has to say.
Oh, blergh!
Toronto Real Estate
Sales Sinking
For September 2008, 6,424 resale transactions were recorded in the Greater Toronto Area (GTA), down 6% from the 6,866 sales of September 2007. In the City of Toronto (defined as the 416 area code) sales declined 11% to 2,546 resale transactions from last September’s 2,854 sales.
When comparing activity to the same period two years ago, GTA sales declined by 3% from the 6,622 transactions recorded in September 2006, and City of Toronto sales declined by 5% from the 2,680 units transacted during the same month in 2006.
Neighbourhoods are an important factor. No matter market conditions, price appreciation and sales activity will vary according to neighbourhood. This September a number of neighbourhoods reported strong sales activity. For example, Scarborough East (E08) reported a 22% increase in sales activity, with strong sales of all housing types. Sales transactions in Streetsville (W19) and Newmarket (N07) each increased by 11% compared to September 2007, driven by strong detached homes sales and condominium townhouse sales respectively.
Toronto Real Estate
Inventory Waterlogged
In September 2008, properties available for sale increased by 27% to 27,373 listings, with 16,236 new listings added during the month. Toronto buyers are still making offers, taking advantage of more selection and time to “browse” as the overall contract-based Days On Market (DOM) increased to an average of 36 days compared to 31 days a year ago. It is important to note that, as with price appreciation and sales activity, DOM also varies by neighbourhood.
When Did Toronto Real
Estate Market Become A GIC?
In the City of Toronto, the average price declined 6% to $393,647. However, this is an increase of 6% compared to the average price of $371,682 in September 2006.
Understandably, the hit to Toronto real estate price appreciation causes the greatest pain to sellers. Perhaps because it’s been a decade since house prices have fallen in the GTA, that month after month the market delivered, it’s an abrupt adjustment to make when price appreciation declines. An adjustment that some sellers have yet to make.
And yet … everyone knew (on some level) that the Toronto real estate boom couldn’t, wouldn’t, continue indefinitely. Booms never do.
Given the shock waves, did this impressive ten-year run seduce people into thinking the real estate market offered a guaranteed return on their “investment”? Did the Toronto real estate market become a GIC in the minds of buyers and sellers?
Will Toronto neighbourhoods that rocketed in price appreciation take on water the fastest? Now that’s an interesting market trend to follow!
The market has changed, but buyers and sellers haven’t abandoned ship. You CAN buy and sell successfully in today’s Toronto real estate market. Call Lauren at 416–550–6991 to find out how.
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