The Millennials are coming

To see the new year kicking it up a notch is pretty standard in Toronto real estate. So the 10% price jump in the past six weeks is not big news in itself. What’s more interesting is the evolution of supply and demand in the GTA.

According to our Board’s figures, 18.4% more detached homes were sold in early February, compared with a year earlier. At the same time, the number of new listings in the system was also up, but only by 3.5%. There were similar results for semi-detached houses, townhouses, and (in some areas) condos.

The sales tell only part of the story. So far this year, we’ve taken part in multiple offers across the City and also in various 905 communities. One downtown sale this week involved “only” seven offers, while a Sage listing three weeks ago attracted 27 bids. In Mississauga and Milton, we spoke with brokers who are getting used to multiple bids on the first night of a listing… they’re starting to resort to setting a date for offers, just like downtown.

With the number of new listings increasing, the figures show us that sellers are not holding back from the market. The real story is that a new generation is entering its home ownership years. Millennials have sometimes confounded the experts. They haven’t bought as many cars as they were supposed to. But home ownership make sense to them, and they know what they want.

Shifts in demand

The strongest demand for homes in Toronto is in the older central neighbourhoods. These are  highly walkable communities that are rich in social infrastructure. Until recently, they were priced below the Toronto average. Now they are the pace-setters in Toronto real estate: Roncesvalles, Leslieville, Dovercourt, Danforth Village, and others like them.

The result is high prices all round, and locational adjustments. In Toronto, the average price for a semi is $700,000, and the average detached is over $1 million. In the 905 belt, the average price for detached homes is less than for a narrow semi downtown. At the same time, average prices in York, Peel, Halton, and Durham are all moving up, in apparent lockstep with Toronto.

House vs. car

The trade-off for many new buyers is in transportation. The $600 a month it costs to operate a basic car can also pay a significant chunk of mortgage. Buyers are making choices today. Many are opting to be closer in: making a choice to pay more for housing, and less for transport.

And significantly, an increasing number of the 905ers who commute are using transit. Only one in four commuters now drives a car, while 80% of the rest rely on GO Transit.

The right time to sell

Those early bidding wars point to a continuing sellers’ market in 2015. Do you know someone who may be ready to sell their home this year? We’d like to hear from you. With our expert marketing, that home will get sold quickly and for the highest price! You can email us, or call James and Joanne at 416-483-8000.

The spring market is up and running

Projected average monthly prices

January update

In Toronto, January home sales are often at the mercy of the weather. In 2015, January’s new listings were up, the number of sales was up, and average prices were up. During the month, the Bank of Canada lowered its prime lending rate, and chartered banks moved key mortgage rates lower. (Experts predict another downward move in rates, in March.)

Demand creates scarcity

The strong demand for houses in the old City of Toronto continued in January.  Some listings received 10 or 20 offers (one Sage listing received 27 bids.) While we in the business may describe it as a scarcity of listings, the truth is that an unprecedented number of people want to live in the central part of Toronto, including older areas with small homes that are rapidly being gentrified.

The average price for a semi-detached home in the City was $667,000 in January. In the 905 area, the average price for a semi-detached home was almost a third less… $455,000, but still up 9.4% compared with a year ago.

The right time to sell

Do you know someone who may be ready to sell their home this spring? We’d love to hear from you. Without a doubt, a properly marketed home will sell quickly and for the highest price in this market! You can email us, or call James and Joanne at 416-483-8000.