Tight Market Results in Strong Price Growth in April
TORONTO – May 5, 2011
Greater Toronto REALTORS® reported 9,041 existing home sales through the TorontoMLS® system in April 2011. This result was down 17 per cent compared April 2010 when sales spiked to a new record of 10,898. While off last year’s record result, April 2011 sales were in line with the average April sales level reported over the previous five years.
“Existing home sales have been strong from a historic perspective through the first four months of 2011. Expect the pace of sales to remain robust through the spring, as the economy expandsand home bu yers continue to benefit from affordable home ownership opportunities,” said Toronto Real Estate Board (TREB) President Bill Johnston.
Market conditions tightened markedly over the last year. April 2011 sales accounted for 62 percent of new listings during the month – up substantially from 53 per cent in April 2010. Tighter conditions resulted in the average April selling price growing by nine percent annually to $477,407.
“The number of listings has been below expectations so far this year. Increased competition between home buyers has led to an accelerating annual rate of price growth,” said Jason Mercer, TREB’s Senior Manager of Market Analysis. “The strong price growth experienced in April should result in more listings and more balanced market conditions.”
Unsurprisingly, we have another month of lower sales and higher prices. This is once again attributable to the fact that there is very little inventory (listings/supply) on the market, and still many Buyers/Demand, due to very low interest rates. However, when looking at these price increases it is important to understand that the numbers may be a little skewed.
The reason is because the average price figures include the sale price of ALL houses in Toronto, from the smallest least expensive, to the largest multi-million dollar mansion. Therefore, for example, if there have been ten 5 million dollar properties sold last month, the average price as a whole will be higher.
Nevertheless, prices are higher but will begin to level off as interest rates begin increasing (and they will). Listings and sales will increase (as they always do in the spring), and as supply and demand converge, prices will remain stable (we will not see double digit percent increases as we have this last year and a half).
Houses will still hold their value, but they may take a little longer to sell!
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