Good Start to 2011
TORONTO – February 4, 2011
Greater Toronto REALTORS® % reported 4,337 transactions through the Toronto MLS® system in January 2011. This result was 13 per cent lower than the record result reported in January 2010.
“While off the record pace experienced a year ago, the GTA resale market has started the year on a solid footing. Home buyers in Toronto and surrounding areas continue to benefit from a diversity of housing types for sale at many different price points,” said TREB President Bill Johnston.
The average selling price for January 2011 sales was $427,037, representing an increase
of over four per cent compared to the average of $409,058 reported in January 2010.
“The average selling price is expected to grow at a moderate pace in 2011. Growth rates in the three to five per cent range will be sustainable from an affordability perspective,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.
Jonathan's Opinion
It is important to fully understand the figures above. The main reason that sales are down relative to last January is not because the market is slowing down, but because there are fewer listings. This means that there are not a lot of properties on the market to choose from. In addition, ever since the announcement of the new mortgage rules (see below), the amount of demand has increased because buyers want to purchase a home before these rules come into effect.
So what we have now is disequilibrium between sellers and buyers (supply/demand). There are more buyers (demand) then sellers (supply) in the market place, which leads to faster sales, less days on the market for listings, and potentially higher prices. In fact, we are starting to see a resurgence of bidding wars and multiple offers.
Although the numbers do not indicate what I’m mentioning, it is happening, and you will see that next month’s market watch report will have significantly different numbers. I am forecasting that after March the market will slow down somewhat (there will not be as much buying frenzy), but prices will not be affected. I believe prices will remain stable throughout all of 2011. In any case, if you are thinking of selling, now is the best time!!
