Good morning everyone;
I hope that everyone had time to perform the 3Rs over the holiday season: Rest, Regroup, and Reflection (on 2012). I also hope that by now, any holiday hangover has subsided.
The days are getting longer and up till this last Wednesday we have had a relatively mild winter. Not too shabby! (Killing my back yard ice rink!)
The Real Estate market although a little calmer over the holidays was still active. Over all we have seen sales transactions decrease but pricing continuing to rise in the freehold market and hold steady in the condo market.
Rentals have been very active as there is a very tight supply of quality rentals. For example, I finally was able to find two clients from Australia an apartment after 4 offers on different condominium apartments. With the time difference, by time I received signed paper work the desired apartment was already rented out or in a bidding war.
I expect 2013 to be much of the same, I.e. An overall healthy market.
Coveted properties will still most likely go into bidding wars or sell quick. Days on Market statistics might increase a bit.
Condo sales should continue to be stable but with much more selection and a longer marketing period. I feel that it would take another 4-6 months for the market to completely digest the last batch of mortgage rule changes which affected the condo market since last summer. Many condo purchasers are first time buyers. Exactly the target group that the mortgage rule changes effected most.
Condo sellers have to wait longer for sales and this also slows down the “upsize/upgrade” market a bit as well.
The Toronto/GTA economy is expected to perform quite well overall and interest rates should remain relatively unchanged at least for most of the year.
I personally don’t feel like the market is going to spike in either direction. No bubble bursting or dramatic upward movement.
The Role Media Plays In Shaping the Market
I pulled this off of Bell’s Internet Home Page “The Loop”, very early this morning– I can imagine how many people see this and “freak out”!
Headline Reads “Say goodbye to your home’s value
Well, it was nice while it lasted. All signs are now pointing to a major housing price correction.”
The link below opens the video attached to the headline above – there is no additional text. Chief strategist John Johnston of Davis Rea does not at all paint the picture of doom and gloom that the headline evokes! He does go on to say that pricing across the country may start to show softening or downward movement but at a very slow pace and not most likely till 2014.
This what the majority of analysts have been forecasting for the last few months. Not nearly as sexy or dramatic as “Say goodbye to your home value…” How many of us would not bother to click the link and actually see the report? Especially if you had to sit through the 30 second advertisement spot first? But you would remember the headline and talk about it at the water cooler. A little irresponsible, but their job is to get hits and visitors to the web site.
Latest Stats! – 2013 GTA REALTORS® Release Mid-Month Resale Housing Figures – January 16, 2013 –
Greater Toronto REALTORS® reported 1,469 sales through the TorontoMLS system during the first two weeks of January 2013. This result represented an increase of 2.4 per cent over the 1,435 transactions reported during the same period in 2012. “The New Year started off on a positive note with residential sales slightly above last year’s levels,” said Toronto Real Estate Board (TREB) President Ann Hannah. “I am cautiously optimistic about this result. It will be important to watch sales trends closely as we move through the first quarter to see if some of the households who moved to the sidelines as a result of stricter lending guidelines are starting to renew their decision to purchase a home.” The average selling price during the first 14 days of 2013 was by up by four per cent on a year-over-year basis to $459,728. “Continuing the trend from 2012, the low-rise segment of the market experienced the strongest price growth as competition between buyers remained quite strong,” said Jason Mercer, TREB’s Senior Manager of Market Analysis. “The average selling price is expected to grow in 2013, but at a slower pace as buyers benefit from more choice.”
In the Market – 2012 Review plus 2013 Outlook
FREE HOLD – Average Home Price Up Strongly in 2012 (See Full Report)
January 4, 2013 — Greater Toronto Area REALTORS® reported 3,690 sales through the TorontoMLS system in December 2012 – down from 4,585 sales in December 2011. Total sales for 2012 amounted to 85,731 – down from 89,096 transactions in 2011.
“The number of transactions in 2012 was quite strong from a historic perspective. We saw strong year-over-year growth in sales in the first half of the year, but this growth was more than offset by sales declines in the second half. Stricter mortgage lending guidelines resulted in some households postponing their purchase of a home. In the City of Toronto, the dip in sales was compounded by the additional Land Transfer Tax, which buyers must pay upfront,” said Toronto Real Estate Board (TREB) President Ann Hannah.
The average selling price in December 2012 was up by 6.5 per cent year-over year to $478,739. The average selling price for 2012 as a whole was up by almost seven per cent to $497,298.
“Robust annual rates of price growth were reported through most months of 2012. Price growth was strongest for low-rise homes, including singles, semis and townhouses. Despite a dip in sales, market conditions remained tight for these home types with substantial competition between buyers,” said TREB’s Senior Manager of Market Analysis Jason Mercer.
Average Detached Home Price in the 416 Area Code in December – $722,393
CONDOS – GTA REALTORS® RELEASE FOURTH QUARTER CONDO MARKET REPORT (See Full Report)
TORONTO, January 11, 2013 – Greater Toronto REALTORS® reported 3,830 condominium apartment sales through the TorontoMLS system during the fourth quarter of 2012. This number represented a decline of 23 per cent compared to 5,005 sales during the same time period in 2011.
The average selling price for condominium apartments in the fourth quarter was $332,410 – down by one per cent compared to the fourth quarter of 2011.
“The condominium apartment market was the best supplied market segment in 2012. Strong condo apartment completions in 2011 and the first few months of 2012 resulted in a substantial number of new listings on the TorontoMLS system last year. With more units for buyers to choose from, the annual rate of price growth moderated,” said Toronto Real Estate Board (TREB) President Ann Hannah.
In the condominium apartment rental market, transactions rose by almost 13 per cent year-over-year in the fourth quarter, while the number of units listed for rent increased by over 17 per cent. Average rents were up on a year-over-year basis for one-bedroom and two-bedroom apartments.
“While some first-time buyers put their decision to purchase on hold in the fourth quarter, many of these people chose to rent a condominium apartment instead. Similar to the ownership market, strong new condo completions prompted a considerable increase in the number of investor-held units offered for rent. However, there was still enough competition between renters to prompt upward pressure on average rents,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.
Have a wonderful weekend!
Early Vacation Alert: March 5th – March 12th – I will have full coverage in my absence.