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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.




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.

The unique 2016 housing market


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 million-dollar semi is offically a thing

Last year, the average price of a detached house in the GTA broke through the million dollar barrier. This spring, it’s the turn of the semi-detached houses. An average semi in central Toronto sold for $1,025,000 in March. Semis in the east and west ends are not that high. And most semis in the 905 area are selling below $600,000. Still, it all shows what market demand can do.

About half the resale homes in the GTA are detached houses, while semis make up less than 10% of the total. (The rest are condo apartments and townhouses.) Millennials are entering the housing market in a big way, and what they’re finding is a shortage of family-sized housing, at any price. For many first-time buyers, the only option is to recalibrate their choice of locations. This may be why prices are shooting up across the region – in Durham, York, Peel and Halton. Prices in those communities are rising at least as steeply as those in the City of Toronto.

For the record, the average selling price of all homes in the GTA is now headed towards the $750,000 mark (about $100,000 higher than a year ago.) In the chart above, the gap between the lines is getting wider. Historically, price increases in Toronto hovered around 6% per year. In each of the past two years, various regions and categories have seen price increases between 10% and 20%. That may not be sustainable as a trend, but it’s also not likely to be reversed. Toronto real estate is going through a transformational change, as people change their perception of the urban region we call the GTA.

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.

GTA Market Update – Dec. 17, 2013

Toront home sales 2013

Setting the stage for 2014: What do rising prices and volumes mean?

Home buyers were busy across the Toronto area this fall. Prices were up for low-rise homes and for condos. The number of sales was also up, in both categories. In the first two weeks of December, the average sale price for a home in the GTA was $520,379 – up 10% over the same period in 2012.

We think it’s remarkable that this level of action is taking place in the 905 area as well as in the City of Toronto. The average sale price of a home in the 905 went up $53,000 since last December (about 11.5% in 12 months.) While low-rise homes are the dominant part of the housing supply outside the City, condo apartments are now growing in importance in the 905.

Signs point to a busy year ahead

Builders are pulling back on new projects. One economist projects a 37% drop in housing starts for 2014, and 28% fewer sales of new homes. Thousands of new buyers are poised to enter the market for a first home in 2014. Finding the right properties for all of them will be a challenge for all of us in the real estate business.

If you’re thinking of selling your home, let us help you with your strategy. We can give you a clear idea of what is happening in your neighbourhood, and we have the marketing expertise to help you take advantage of the demand for housing. You can email us, or call James and Joanne at 416-483-8000.