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Has reality Finally Hit Toronto Real Estate Market?

 

The Toronto Real Estate Board released its February sales number to the glee of many in financial circles.  Sales Collapsed by 20%  SHOUT the headlines!


http://www.torontorealestateboard.com/market_news/market_watch/2013/mw1302.pdf


In the front page chart


Condo apartments

Month over month % change - 20%


This is in direct conflict with the chart immediately below that shows new listings at 11,052  down 12% from 2012.


YET Days on Market [DOM] increased to 28.... 28 days on market is a one month supply of homes for sale A Seller's Market FIRMLY continues [in the Toronto resale market] with multiple offers on detached and semi detached properties all around the GTA.   


Now, have a look at the chart above.  Detached home sales in the 416 numbered 749.  The 905 area code sold 2,025 homes in that same period.  A WHOPPING 3 times the number.  So, as the singles start families or find their BFF and want more space, they migrate from the glamour of the city core and find their own white picket fence. Is the Toronto Land Transfer Tax singularly to blame?  The average home price in Mississauga or Milton, Burlington is more appealing but now you need to go substantially further to save. Ajax and Oshawa are very appealing.


The most confusing is the BOM announcing 2.99% fixed for 5 year financing when typically the interest rates increase in spring to coincide with the RRSP and Tax Deadlines combined with mortgage demand for spring borrowings.  Simply Put, There are annual interest rate fluctuations to match Home Buyer demand.


This creates conflicting media messages that make Buyers Hesitate. Additional mortgage qualification tweeking has removed some buyers from the POTENTIAL PURCHASER pool, yet has effectively changed nothing. CMHC may not insure purchases in excess of a 25 year Amortization [AM] or Purchases in excess of ONE MILLION.  OK, but Genworth and MICC will gladly accept your insurance premium, funding with a first line financial institution and provide 30 year AM's.


I am more concerned about the announcement of continuing layoffs in a variety of business sectors combined with aged attrition in the workforce [retirees].  Part Time and Contract positions do not have the income and ability to qualify for mortgages.


If We are having a this conversation, this is good.


What do you want to do?

 

 


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David Pylyp

Etobicoke Real Estate Agent

Accredited Senior Agent for York Peel and Halton Regions

Lives in Toronto and promotes Giving Value

As we move forward It would be good if you also circled me on Google +
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Comment balloon 1 commentDavid Pylyp • March 06 2013 07:47AM

Comments

Well real estate and the economy have always been cyclical so although we feel we are on a downward slope, it will turn around again.  It always does.  Times like this create a little burp in the industry and sends everyone scrambling to try and adjust and play catch up and then we return to normal again.

I realize my cup may be half full but the interesting thing about times like this is when you see people become very innovative and creative with their business.  New products and services come to market that you may have never considered before if things were always hunky dory, we'd all be satisfied with the status quo.

Thanks for the post!

Posted by Rachel Craggy, CM Staging, Toronto Home Staging (CM Staging Solutions Inc) over 6 years ago

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