I just did a search of recent sales in some of the key central Toronto districts. Over 44% of houses that sold in the last week in these areas sold over the asking price. This is a statistic which fits right in with springtimes from recent years, but it may be a surprise to casual observers who would guess that housing is still in a slump everywhere!
This winter and spring, agents were seeing what I called “underground” bidding wars… in which the final sale price was still below the list price, so that you would have to know the details about just how many buyers were making offers. When the price goes over list, it’s easier to assume that there was competition (or at least, the fear of competition.) So far in 2009, the actual sale prices are tending to settle 1% to 5% above list, whereas in recent years many bids would end up 6% to 15% over (or even higher.)
Prices close to a new high
So far this month, average prices in the GTA have been extremely close to the record highs from last April and May, but it doesn’t seem likely that May 2009 will set a new record. From most people’s perspective, it’s enough that the market is healthy and that buyers are finding attractive homes to buy.
GTA Monthly Sales Chart May 2009
Definitely an OK time to list your home
Back in January, I was ready to acknowledge that 2009 would be a year of modest expectations, with average home values back to the levels of two or three years ago. Now, in mid-May, the current average resale price across the GTA looks ready to push past all previous record levels. So far, monthly average home sales in the Toronto area have never exceeded $400,000. We’re not there yet, but the TREB average for the first half of May stood at $399,891. Remarkable.
Rosedale houses - Ratio of Sale Price to MPAC Assessment
I was curious to see if the recent spate of sales showed a change of direction in the Rosedale house sales chart I posted last month. The last few weeks have added 12 more sales to the version posted in April.
As the chart shows , the volume of sales has picked up in the last few weeks. We’re back to a more typical 10 sales per month, compared to 2 per month in the depths of winter. The Price-to-Assessment ratio seems to be continuing in the same band as before, between 0.9 and 1.2. I’m not doing this chart on other areas at present, but I’d guess that homes in more typically-priced executive areas are selling at higher ratios.
These stats are clearly open to interpretation… My take is simple: in a local market where the median price is around $2 million, buyers are less motivated by cheap financing, and more interested in fundamental value opportunities.
The monthly average sale prices in Toronto continue to tell their own story. Market participants are flowing back in droves. Since January, volumes are up and prices are up… not to record levels, but back to typical levels.
The 2 key factors
The record-low interest rates have made buying a home dramatically more affordable for first-time buyers in Toronto this spring. This is the key economic factor for most buyers. The other element influencing behaviour is pent-up demand. People, both buyers and sellers, held back during the last 12 months. Now, buyers are ready and willing, but are being forced to wait until more resales come available.
It can’t be stressed enough… real estate is local! Activity will vary in different areas of the GTA, just as there are dramatic variations between communities in Ontario, across Canada, and internationally. If you’re interested in condos at Yonge and Sheppard, your stats will not be the same as those for detached homes in Rosedale. Whatever your area of interest, you should be working with a realtor to provide you with valid data and meaningful context.