October 2011
Pace of Home Sales Remains Brisk in October
Toronto, November 7, 2011
Greater Toronto REALTORS® reported 7,642 home sales through the TorontoMLS® in October 2011. This represented an increase of 17.5 per cent compared to the 6,504 transactions reported in October 2010.
Monthly sales data follow a recurring seasonal trend that should be removed before comparing monthly results within the same year. After adjusting for seasonality, the annualized rate of sales for October was 97,100, which was above the average of 90,700 for the first three quarters of 2011.
“The pace of October resale home transactions remained brisk in the GTA. This bodes well for a strong finish to 2011,” said Toronto Real Estate Board President Richard Silver. “Home buyers who found it difficult to make a deal in the spring and summer due to a shortage of listings have benefitted from increased supply in the fall.” The average selling price through the TorontoMLS® in October was $478,137 – up eight per cent compared to October 2010.
“Sellers’ market conditions remain in place in many parts of the GTA. The result has been above-average annual rates of price growth for most home types,” said Jason Mercer, the Toronto Real Estate Board’s Senior Manager of Market Analysis. “Thanks to low interest rates, strong price growth has not substantially changed the positive affordability picture in the City of Toronto and surrounding regions.”
Jonathan’s Opinion
Prices have increased by 8% this same period last year. Notice, however, that listings have also increased. This shows that there are more people selling this year than last year. However the sales have also increased year over year, which means that although there are more people selling this year, there is still a lot of demand, and more people buying. As long as this is the case, prices will continue to rise.
However, prices will not rise as fast and as sharply if listings (houses available on the market) continue increasing. This is one sign that the market may be reaching equilibrium (same amount of buyers as sellers). As long as interest rates stay low, however, it will take a much longer time to reach equilibrium because there will always be more buyers than sellers.
To reach price stability, we must reach equilibrium between supply and demand (sellers and buyers).
