Toronto home sales mark best June yet
Toronto real estate turning into a seller’s market
Garry Marr, National Post
The Toronto real estate market came roaring back last month to record its best June yet and is poised to quickly turn into a seller’s market again with prices rising quickly.
The Toronto Real Estate Board said yesterday that 10,955 homes changed hands in the Greater Toronto Area in June, a 27% increase from the 8,600 homes sold a year ago. It was the best June for sales since the board started tracking the numbers in the mid-1960s.
So far, the impact on prices has been muted with the average sale price in the GTA last month $403,972, up 2% from a year earlier.
Comment: Muted? We have the best sales volume for June ever, plus prices are starting to go up. And that is muted? I would think that after the all the doom and gloom that has been shoved our face for the past year, this would be cause for dancing in the streets.
The small increase won’t hold if demand continues to heat up and supply doesn’t increase.
Comment: Nope, it is just going to go up. Bidding wars have spread outside the city and are now taking place in the 905. There is very little inventory and anything that is halfway decent is being fought for. Every time there are multiple offers, it pushes prices up. And with low mortgage rates, people can afford to bid high.
“I think the next stage” might be price pressure, said Doug Porter, deputy chief economist at BMO Capital Markets.
“The moderation we have seen in prices may not last long, if this kind of sales and listing balance remains in place.”
There were 30% fewer homes for sale in Toronto last month than there were in June, 2008. New listings shrunk by 17% last month from a year ago.
Comment: What truly makes no sense is why people are not listing. If the economy is so bad and so many people are losing their jobs, why are they not cashing out when things are hot? And the fear of getting a low price is gone, where are the listings? I have buyers lined up and ready to go, there is just nothing out there for them.
Mr. Porter said the mad scramble to buy a house is playing out across the country, as consumers wade back into the market, tempted by interest rates not seen in the past 50 years. Five-year fixed rate mortgages were as low as 3.75% last month, although they’ve nudged back up to about 4.5% since.
Comment: But variables are still in the 2.5-2.65% range!
“Vancouver sales were up about 76% from a year ago, the second best June ever for them. Calgary sales were up 27%, and Edmonton sales were up 38%,” the economist said.
“A lot of people emerged from their foxholes over the winter and have been brought in by low mortgage rates or a belief the economy is going to improve. There was some pent-up demand, things almost froze over solid over the winter.”
While the market has shifted gears quickly in Canada, avoiding the prolonged housing downturn seen in the United States, Mr. Porter says employment data in the coming months still present a hurdle.
Don’t tell that to Toronto realtors who are basking in a spring market reminiscent of 2007 – a record year for sales.
“May was the biggest May we have had in the history of our company, it eclipsed everything in dollar value and unit sales,” said Michael Kalles, chief executive of Harvey Kalles Real Estate Ltd. “Prices are still flat, it’s the actual volume of transactions that is still climbing.”
So is it a buyer’s market or a seller’s market today? “I have no comment on that,” said Mr. Kalles. “I’m seeing some very well-priced homes, but I’m also seeing some competition. We do see houses selling for more than asking price.”
Comment: Coward. I will say it – IT IS A SELLER’S MARKET!
The story of rising sales, small price increases and limited inventory is consistent across the GTA. The city of Toronto recorded 4,362 sales last month, up about 25% from a year ago. Prices in Toronto rose about 2% from a year ago.
In the 905 region, sales jumped by about 29% from a year ago, while prices jumped 2% during the same period.
Jason Mercer, TREB’s senior manager of market analysis, said the pent-up demand in the market is largely responsible for the latest surge in sales. On a seasonally annualized basis, June sales translate into about 100,000 sales in a year. In January, that figure was closer to 50,000.
“Even in a recession sales were very, very low,” says Mr. Mercer. As for prices, he pointed out six months ago they were down 9% year over year. “There is definitely some upward pressure on price,” he said, adding year-to-date the average sale price is still behind where it was in 2008.
Comment: So we went from 9% down to 2% higher. An 11% price increase in the past 6 months? And that is being called muted? That is flat prices? Regardless, sales are up, prices are up. The panic is over and we have a hot market again. Maybe too hot, but it is better than what is happening to the south.
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