Author Archives: James Barrass

About James Barrass

James Barrass is a licensed Realtor with Sage Real Estate in Toronto, Canada.

2018 – a startlingly normal year

Toronto Home Sales 20181106

Take a minute to look at this chart of Toronto home prices. What strikes you first?

The red line (2017) is clearly the odd one out. The months from January to April that year were surreal. But look back to 2016, and you can see the run-up taking place, as the year-over-year gap gets increasingly wider. In retrospect, the fall of 2017 looks normal, if you compare it with the years before 2016. The years from 2013 to 2015 all resemble each other, with similar seasonal patterns and annual increases within a band of 6% to 10% – perhaps a bit on the high side, historically.

What about this year so far?

The chart shows the sales prices for ten months of 2018 (in black), overlaid on our projection for the year (the grey dots). We made our projection back in January, and it’s a simple formula that builds on the average month-to-month market behaviour from the past two decades.

Most years we’ll see some variations as the various months come in higher or lower than projected. What’s unusual in 2018 is how exactly the ten months have tracked the historic pattern. It’s almost as if everyone decided that we’d had enough excitement for a while!

Trends to watch

Beneath the placid surface, of course, there are strong undercurrents of change. The most obvious one is that condo apartments have become more expensive, in proportion to houses where you own the land. It’s clear that affordability has been the key driver. Thousands of first-time buyers can afford a condo, but not a semi or a detached house. The competition for apartments has increased, to the point that the average price for a condo is now close to 55% of the average price for a detached house, across the GTA. Two years ago, condo prices were at around 40% of prices for detached homes.

For young families looking for a conventional house, their search is now more likely to include suburban and exurban locations. As GO service becomes more frequent, many communities along the commuter lines are getting a lot more interest from downtown agents.

Money from wealthy overseas families has played a significant role in Toronto real estate, as it has in other world cities including Vancouver. These investors are not going away, but the rate of spending has changed, and it will continue to fluctuate in response to economic and political changes.

What’s next…

Strong demand for housing is a given. While buyers are being more cautious with their spending, there is so much competition for homes and apartments that it takes a lot of work to find the right place, at a price that’s affordable.

As experienced baby-boomer agents, we’re pretty smart about this stuff. We relish challenges, we like to share, and we’re available to help… You can email us, or ask for James and Joanne at 416-483-8000.

 

 

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First month of fall…

Toronto Home Sales 20171004

Our chart tells the story

Unlike school terms, which typically start in the fall,  the fall season in real estate usually gets second billing to the spring. While it’s shorter (about three and a half months, as opposed to six months), it’s just as important. Some years, the highest prices happen in October or November. While this likely won’t be one of those years, there’s always a fall surge, as buyers and sellers are both out in force.

So far, the fall market is behaving as expected. Sale prices are up almost 6% over August, and a modest 2.6% over last September. House prices in the 905 area are taking a break, while City prices are still rising. Prices of condo apartments have continued their spring surge this fall, as buyers shift their sights to the more affordable categories of housing.

The really big deal in the September statistics is a 9.4% increase in new listings, compared to a year earlier. This is important for two reasons. First, in a market like Toronto’s with strong demand, more listings mean more selection, and this always draws more buyers. Second, an increase in the supply of listings is essential to the long-term health of the housing market.

If we had to pick one event which triggered the feverish price increases of early 2017, it was the drying up of supply. Over the past several years, the number of resale purchases kept increasing, while the number of resale listings failed to keep pace. By December 2016, the cupboard was virtually bare.

Naturally, the concern is that a similar situation could occur this winter. If the number of available listings is low in January 2018, expect another crazy spring market. We will be watching the numbers closely!

Need some smart advice?

In a rapidly changing market, you need smart, timely advice, whether you’re a buyer or a seller. As experienced baby-boomer agents, we’re pretty smart about this stuff.

We relish challenges, we like to share, and we’re available to help… You can email us, or ask for James and Joanne at 416-483-8000.

 

 

Reality check, halfway through 2017

GTA Weekly 20170629

York, Toronto and Peel lead the GTA

We’ve been focusing for a few years on the remarkable price increases of homes in the 905. The reasons were clear: buyers were finding a greater supply of low-rise homes, within commuting distance and at lower prices. In general, the percentage price increases have been greater outside the City of Toronto. It makes perfect sense, since buyers can get more house for their money, when they travel further afield.

The chart above shows weekly average price movements during the first half of 2017. York Region kept its top position in this chart, and at the midpoint of 2017 the York prices are up almost 14% over the past six months. Toronto and Peel region have shown similar gains over this period. Meanwhile, average prices in Halton and Durham regions (which peaked dramatically during the spring) are now back at their January levels.

Beyond the GTA

Cities like Hamilton, Guelph, and Barrie have been getting more attention this year, from Toronto millennials looking for affordable urban settings. As agents, we’ve gotten used to checking the GO schedules along the various train corridors, and the EQAO scores for schools in far-flung school districts, as part of our daily routines. It’s increasingly clear that the Toronto megacity is evolving into a regional cluster of communities.

Babies, babies

Demographics tells the key story here. Millennials were called the “Baby-Boom Echo” generation. Economists were fascinated as this group delayed car purchases, household formations, and home buying plans. It’s becoming clear that this generation is finally asserting its priorities. Millennials may not do things like their predecessors, but they will figure out how to manage housing, transportation, and kids – in their own ways.

Advice from baby boomers?

In a rapidly changing market, you need smart, timely advice, whether you’re a buyer or a seller. As experienced baby-boomer agents, we’re pretty smart about this stuff.

We relish challenges, we like to share, and we’re available to help… You can email us, or ask for James and Joanne at 416-483-8000.

“Buy the house, not the price”

Reverting to the norm?Toronto Sale Prices 20170605

The average prices for May 2017 are in, and the results are getting a lot of attention. Buyers seem to be lining up into two camps – the “wait-and-see” school, and the “fortune-favours-the-bold” group. Sellers, meanwhile, are understandably confused.

Is it still a sellers’ market?

Yes. There are many more buyers than sellers, and homes are selling quickly, usually over asking. The average selling price of all GTA homes was $863,910 in May, about 15% up over last May. In many neighbourhoods, detached and semi-detached homes were getting sale prices between 25% and 30% higher than last spring.

Sellers are not all of the same mind. Some genuinely need to sell at this time, while others will have been attracted by the notion of cashing out. This diversity of motives can be confusing. Asking prices are also all over the map. On any given street, one house can be priced drastically under its likely selling price; while another comparable house can come out the same week priced hundreds of thousands of dollars higher. Buyers (and their agents) then have to unravel the conflicting narratives and determine where the likely values are.

Should I buy or should I wait?

This question never gets old. If you have a good reason to buy, and you have a budget set, then yes, buy. Don’t buy just any old thing that comes up in your price range, but buy the home that makes sense for you. If the only homes you want are priced out of your range, then do some soul-searching. Can you alter your criteria? Will your purchasing power increase significantly, or will your needs change in a few years?

If you’re buying a property to live in, think long and hard about how well a home can serve your needs for at least three to five years. “Buy the home and not the price.” It’s not all about price in this market. A qualified home buyer can have choices, and (especially if you’re a first-time buyer) you may need to talk with an experienced Realtor to fully evaluate your options.

If you’re buying a property primarily as an investment, then your criteria will be drastically different and you will be seeking financial and tax advice.

Expert advice – at your fingertips

In a rapidly changing market, you need smart, timely advice, whether you’re a buyer or a seller.

We relish challenges, we like to share, and we’re available to help… You can email us, or ask for James and Joanne at 416-483-8000.

Keeping a cool head

Toronto home prices March 2017

If you thought 2016 was a roller-coaster year, 2017 is shaping up to be more of the same. Given the already high prices in Toronto, it’s natural that the lower prices in surrounding communities have drawn off a lot of the traffic, and news reports have now caught up to the boom in 905 and the other parts of southern Ontario.

Our chart (above) shows that the first two months’ of sale prices have already eclipsed the peak moments of 2016. Our dotted-line “projection” suddenly looks highly unlikely. If there are any winners, it may be the older home owners on fixed incomes who now have a chance to make a windfall gain.

For buyers today, the main thing is to keep a cool head and do some serious thinking about what really matters. For many millennials, the imperatives of starting a family are becoming a top priority. Where can they find space to live, commute, and bring up children?

If you’re a buyer, you need to be prepared. With your mortgage pre-approval and a strong understanding of the market, you’ll be able to make smart decisions. You may not win on your first time bidding, but the best-prepared buyers have a strong edge in this market.

If you’re a potential seller, things look easier. But you still need a real estate agent who puts your needs first, ahead of just making an easy sale.

In a rapidly changing market, you need smart, timely advice, whether you’re a buyer or a seller. We’re available to help… You can email us, or ask for James and Joanne at 416-483-8000.

The unique 2016 housing market

toronto-home-sales-20161118

Now that we’re most of the way through November, the story of 2016 has basically written itself. In the chart above, you can see that the year-over-year increase from 2015 to this year has been steadily widening. In percentage terms, what was a 10% increase a year ago is now a 20% increase. (Over the past 20 years, the average increase was around 6%.)

Where the sales are

Most of the sales in our real estate board take place in the 905 belt. Sales in the City of Toronto make up around 38% of the total; the other 62% are mostly in Halton, Peel, York and Durham. Average prices in York and Halton (where there are fewer condos) are actually higher than in the City. Moreover, the rate of price increases has been highest in the outlying communities.

The price increases should be seen against a backdrop of increasing supply. Record numbers of houses and condos have been changing hands during the past two years. At the same time, this increase has not kept pace with the surge in demand. Houses are especially sought after, with most houses receiving more than one offer, and many of them attracting five, ten or more buyers.

Boom, bust and echo

Some people had been wondering if millennials would take to home ownership. The unique 2016 market seems to answer that question. Add to this the much-vaunted foreign investors (who are definitely players in some parts of Toronto) and we have the recipe for a continuing sellers’ market.

If you’re a buyer, you need to be prepared. With your mortgage pre-approval and a strong understanding of the market, you’ll be able to make smart decisions. You may not win on your first time bidding, but the best-prepared buyers have a strong edge in this market.

In a rapidly changing market, you need smart, timely advice, whether you’re a buyer or a seller. We’re available to help… You can email us, or ask for James and Joanne at 416-483-8000.

 

 

The surprising fall market

toronto-home-sales-20161020

In real estate, the fall market is often seen as the poor cousin to the spring. In reality, it’s an important part of prime time, about 16 busy weeks of buying and selling.

Some Toronto home prices have already reached new highs in September and October, surpassing the marks set in April or May. For most practical purposes, we can assume that typical prices (and levels of competition) are about the same now as they have been throughout 2016.

Tighter lending criteria came into effect on October 17th, forcing some purchasers to rethink their options. But in Toronto and the 905 area, the large number of qualified home buyers easily outnumbers the supply of homes coming onto the market.

It’s hard to call this a “shortage” of listings. What’s happening is that while more properties are being listed, they are getting snapped up in record numbers. The result is that there is very little available selection at any point in time.

If you’re a buyer, you need a coherent strategy. Working with your agent, you need to build a real-time model of the actual market activity in your chosen area. You need to know the sold prices, the numbers of offers being presented, how high the bidding is likely to go. With your mortgage pre-approval and a strong understanding of the market, you’ll be able to make a smart offer on a property that meets your own criteria. You may not win on your first time bidding, but the best-prepared buyers have a strong edge in this market.

In a rapidly changing market, you need smart, timely advice, whether you’re a buyer or a seller. We’re available to help… You can email us, or ask for James and Joanne at 416-483-8000.