They won’t tell you this in the local newspapers, because the truth just doesn’t sound as scary…
Most of the newspaper headlines last week were all about “Sales Down In April” or something similar. Although true, those headlines really don’t tell the whole story, nor do they accurately reflect the realities of a market which has finally reached an equilibrium or an even keel so to speak.
Here are the April 2008 stats… sales of all types of residential homes totalled 8,762 in the month, down about 7% from 2007 which was a record month.
Here’s a dose of reality: compare that to other Aprils this century, sales this year exceed those in the years 2000, 2001, 2002, 2003 and 2006 and were just slightly under sales in 2005 (8,834). Only 2004 and 2007 were better.
The average sale price across the GTA came in at $398,687 this April, up 5% from one year ago. This moderate year-over-year price increase was predicted by CMHC in their 2008 Market Report and shows that we are not ‘out of control’ like many of the US markets.
For a buyer’s benefit, the listing inventory has finally climbed to 24,530 houses and condos, approximately 1,700 more than April 2007. This has lessened the pressure from multiple offers and has allowed purchasers (especially in the hot pockets of Toronto) to negotiate one-on-one for a change.
Despite this, with listings that are priced well, and looking nice, we’re still seeing some competition in the good neighbourhoods.
If some of our readers have been hoping for a change to a buyer’s market, it’s definitely not happening. The ratio of sales-to-listings, at 35.7% for April, is definitely indicating a solid, but not runaway, seller’s market.
Why is Toronto’s real estate market still strong? Primarily, affordability is still there for many buyers.
The rate on a variable mortgage is now below 4% (usually 75 basis points or more below the bank prime rate, currently at 4.75%) – the best it’s been for quite a few months.
While we’ve seen some job losses in the automotive industry, overall our GTA economy is strong.
Expect this year to have a delayed ’spring market’ with May and June being quite active because of the harsh winter we’ve experienced.
What do you think? Feel free to make a comment below!