November Market Watch Report, and what I believe is going on!

Sales Dip in November while Selling Prices Increase
TORONTO, December 5, 2012 –

Greater Toronto Area REALTORS® reported 5,793 sales in November 2012 – down by 16 per cent compared to November 2011. “Transactions have been down on a year-over-year basis since June, after being up substantially in the last half of 2011 and the first half of 2012. Some buyers pulled forward their decision to purchase, which has impacted sales levels in the second half of 2012,” said Toronto Real Estate Board (TREB) President Ann Hannah.

“Stricter mortgage lending guidelines, including a reduced maximum amortization period and a purchase price ceiling of one-million dollars for government insured mortgages, have prompted some buyers to move to the sidelines. This situation has been exacerbated in the City of Toronto because the additional upfront Land Transfer Tax takes money away from buyers that otherwise could be used for a larger down payment,” continued Hannah.

The average selling price was up by 1.6 per cent annually to $485,328. The MLS® Home Price Index (MLS® HPI) Composite Benchmark was up by 4.6 per cent compared to last year. “The moderate annual rate of price growth compared to previous months was largely due to a different mix in detached home sales this year compared to last, particularly in the City of Toronto. The share of detached homes that sold for over one-million dollars was down substantially, which influenced the overall average price,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.

“The MLS® HPI detached benchmark price, which tracks the price for a home with the same attributes over time, was up by almost six per cent in Toronto, suggesting that market conditions for low-rise homes remain quite tight despite a changing mix of sales,” added Mercer.

Jonathan’s Opinion:

November is the fourth consecutive month to see a drop in sales relative to 2011. Prices, however, are not affected. Pessimists, columnists and the media are starting to mention a “bubble pop”, “a crash”, etc. I do not agree.

I want everyone to think back to the real estate market in 2010…the same thing happened that we are seeing now…sales were down significantly relative to 2009 but prices were not affected.

Why did this happen? Simple…2009 was an extraordinary year for sales because interest rates were reduced to their historical lows and this induced a lot of people to buy homes, thus leading to higher sales. Then in 2010 new policies were implemented to slow down this “run-away market”, and sales suffered, but prices did not.

Near the middle of 2011, everyone adjusted to these new policies, and started to buy again.The market once again “took off” until the middle of 2012. Then new mortgage policies were once again introduced, and sales are once again suffering, but prices are not.

Once people begin adjusting to these new changes (and they will), the market will once
again turn around. I don’t think we will see double digit price increases, but all the “doom and gloom” will disappear. Yes houses may take a little longer to sell, but they will sell…and I believe that prices will not correct.

October Market Watch- Once Again, Sales Down, Prices Up!

Average Price Up in October, Despite Fewer Sales
TORONTO, November 3, 2012 –

Greater Toronto Area REALTORS® reported 6,896 transactions through the TorontoMLS system in October 2012 – a decrease of 7.1 per cent compared to October 2011. There were two more business days in October 2012 versus October 2011. On a per business day basis, transactions were down by 15.6 per cent.

“Sales have decreased in the second half of this year compared to 2011, especially since the onset of stricter mortgage lending guidelines at the beginning of July. The prospect of higher monthly mortgage payments due to the reduced maximum amortization period has prompted some households to delay their home purchase,” said Toronto Real Estate Board (TREB) President Ann Hannah.

The average selling price for October transactions was $503,479 – up 6.2 per cent compared to October 2011. The MLS® Home Price Index composite benchmark price, which allows for an apples-to-apples comparison in terms of home attributes, was up by 5.1 per cent.

“We continue to see price increases well above the rate of inflation. Active listings have remained low from a historic perspective, so substantial competition between buyers still exists, especially for low-rise homes,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.

“It should be noted, however, that the annual rate of price increase has been edging lower over the past few months as the market has gradually become better supplied,” continued Mercer.



Jonathan’s Opinion

These numbers continue to indicate what I mentioned on my September report…that the market is cooling off. The market is not “crashing” or “correcting”, it is “normalizing” (which is healthy for the economy)…there are still too many buyers (demand) out there for a crash to occur. What is happening is that homes are not selling overnight and for ridiculous amounts over list price anymore (although some still are). Financial institutions are becoming stricter in giving out mortgages, and qualifying is becoming more difficult. These numbers will be consistent throughout the winter. One thing to look out for is the continuation of these numbers even next spring…if that happens, then we may have a problem. I believe that we will have another robust spring come 2013.

September Market Watch Report- Sales Down, Prices Up!

Strong Average Price Growth in September
TORONTO, October 3, 2012 –

Greater Toronto Area (GTA) REALTORS® reported 5,879 transactions through the TorontoMLS system in September 2012. The average selling price for these transactions was $503,662, representing an increase of more than 8.5 per cent compared to last year.

The number of transactions was down by 21 per cent in comparison to September 2011. However, it is important to note that there were two fewer working days in September 2012 compared to September 2011. The majority of transactions are entered on working days. On a per working day basis, sales were down by 12.5 per cent year-over-year.

“While sales have been lower due to stricter mortgage lending guidelines, we continue to see substantial competition between buyers. The months of inventory trend remains low from a historic perspective, which explains the strong price increases we are experiencing,” said Toronto Real Estate Board (TREB) President Ann Hannah.

September average selling prices were up compared to last year for all major home types. Price growth was strongest in the City of Toronto, including for condominium apartments with eight per cent year-over-year growth. All benchmark home types included in the MLS® Home Price Index (MLS® HPI) experienced year-over-year price increases, with substantially stronger increases for low-rise home types.

“Barring a major change to the consensus economic outlook, home price growth is expected to continue through 2013. Based on inventory levels, price growth will be strongest for low-rise home types, including single-detached and semi-detached houses and town homes,” said TREB’s Senior Manager of Market Analysis, Jason Mercer.

Jonathan's Opinion

These numbers indicate that the market is cooling off, and I believe that it is…what I mean by this is that the market is not “crashing” or “correcting”, it is “normalizing” (which is healthy for the economy)…there are still too many buyers (demand) out there for a crash to occur. What is happening is that homes are not selling overnight and for ridiculous amounts over list price anymore (although some still are). Financial institutions are becoming stricter in giving out mortgages, and qualifying is becoming more difficult. These numbers will be consistent throughout the winter. One thing to look out for is the continuation of these numbers even next spring…if that happens, then we may have a problem. I believe that we will have another robust spring come 2013.

August Market Watch Report- Sales Down Again, but Prices Still Climb

Low-Rise Home Sales Drive August Price Growth
TORONTO, September 6, 2012 –

Greater Toronto Area (GTA) REALTORS® reported 6,418 sales through the TorontoMLS system in August 2012, representing a year-over-decline of almost 12.5 per cent compared to 7,330 sales reported in August 2011. The number of new listings reported in August was down by 5.5 per cent compared to the same period in 2011.

“Residential transactions were down in August compared to last year. Stricter mortgage lending guidelines, which came into effect in July, arguably played a role. In the City of Toronto, the additional impact of relatively higher home prices coupled with the upfront cost associated with the City’s Land Transfer Tax led to a stronger annual decline in sales compared to the rest of the GTA,” said Toronto Real Estate Board (TREB) President Ann Hannah.

The average selling price for August 2012 transactions was $479,095 – up by almost 6.5 per cent compared to August 2011. The annual rate of price growth was driven by the low-rise home segment in the City of Toronto, including single-detached homes with an average annual price increase of 15 per cent. The MLS® Home Price Index (MLS® HPI)* composite index, which allows for an apples-to-apples comparison of benchmark home prices from one year to the next, was up by 6.3 per cent year-over-year.

“While sales were down year-over-year in the GTA, so too were new listings. As a result, market conditions remained quite tight with substantial competition between buyers in the low-rise market segment,” said Jason Mercer, TREB’s Senior Manager of Market Analysis. “The trends for sales and new listings are moving somewhat in
synch, suggesting that the relationship between sales and listings will continue to promote price growth moving forward.”

Jonathan's Opinion

To put things in perspective, focus on new and active listings. New listings have decreased while active listings (properties currently on the market) have increased. This means two things: Firstly, many sellers held off on selling until summer was over (which is a seasonal commonality), which lead to fewer selections for buyers, and thus a reduction in sales.

Secondly, many sellers are trying to take advantage of the high prices (probably
unrealistically so), and are asking too much for their homes, and as a result they are not selling, thus leading to a reduction in sales. You will notice that new listings will increase next month, active listings will decrease, and sales will begin climbing again.

The market is definitely calmer now, but is nowhere near a “correction”.

July Market Watch - Sales Down, but Market is Still Strong

GTA Home Prices Up in July
TORONTO, August 3, 2012 –

Greater Toronto REALTORS® reported 7,570 sales in July 2012, representing a decline of 1.5 per cent compared to 7,683 sales reported in July 2011. The decline was most pronounced in the condominium apartment segment in the City of Toronto. Total sales in the rest of the Greater Toronto Area (GTA) were up compared to the same period last year.

“Very strong annual sales growth in the first half of 2012 and an earlier peak in sales this spring compared to 2011 help explain more moderate sales this summer. New mortgage lending guidelines and the additional upfront cost of the City of Toronto land transfer tax also prompted some households to put their buying decision on hold,” said Toronto Real Estate Board (TREB) President Ann Hannah.

The average selling price in July 2012 was $476,947 – up by four per cent compared to July 2011. The MLS® Home Price Index (MLS® HPI)* composite index, which allows for an apples-to-apples comparison of benchmark home prices from one year to the next, was up by 7.1 per cent year-over-year.

Jonathan’s Opinion

Based on this month’s data, rumors are already spreading that the Toronto and surrounding area’s real estate market is reaching its peak, and is due for a correction. While it is true that we may be due for a correction, I can assure you that the time is not now.

Although this is the second consecutive month that sales have been lower than the same
month of 2011, it doesn’t mean that a correction is here. We have had a hotter than expected summer, and a lot of people are away on vacation. Most people have put their buying and selling on hold. Once the fall season arrives, you’ll see sales increase again.

June Market Watch Report

Low-Rise Home Types Drive June Price Growth
TORONTO, July 5, 2012 –

Greater Toronto REALTORS® reported 9,422 home sales through the TorontoMLS system in June 2012. The number of transactions was down by 5.4 per cent in comparison to June 2011. The year-over-year decline was largest in the City of Toronto, where sales were down by 13 per cent compared to June 2011. Sales in the rest of the Toronto Real Estate Board (TREB) market area were comparable to a year ago.

“Buyers continue to face the substantial upfront cost associated with the City of Toronto’s unfair Land Transfer Tax,” said TREB President Ann Hannah. “Recent polling by TREB suggests that many households are considering home purchases outside of the City of Toronto to avoid paying the Land Transfer Tax. This goes a long way in plaining the disproportionate decline in sales in the City versus surrounding regions.”

The average selling price in June was $508,622 – up by 7.3 per cent compared to June 2011. The mortgage payment associated with the average priced home in June, assuming five per cent down and a five-year fixed rate mortgage amortized over 25 years, would account for approximately 35 per cent of the average household’s income in the GTA after adding property tax and utility payments.

“According to new mortgage lending guidelines set out by Finance Minister Jim Flaherty, the GTA housing market remains affordable. The share of the average household’s income going toward major home ownership payments for the average priced home remains below the 39 per cent ceiling recently announced by Mr. Flaherty,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.

Jonathan's Opinion

Based on this month’s data, rumors are already spreading that the Toronto and surrounding area’s real estate market is reaching its peak, and is due for a correction. While it is true that we may be due for a correction, I can assure you that the time is not now.

Even with the new mortgage rules (see last months post) and lower sales, the market will continue behaving the way it has up to now. Prices will continue climbing, albeit slower; demand is still higher than supply, which will sustain the Seller’s market and bidding wars.

More Changes to Mortgage Rules

Finance Minister Jim Flaherty has announced the fourth round of mortgage restrictions in four years.

Starting 18 days from now (July 9, 2012), those with less than 20% down payment will no longer be able to get a prime mortgage with:

- a 30-year amortization...the maximum will now be 25 years.

- a refinance to 85% LTV (LTV = Loan to Value ratio - basically the percentage of the value being borrowed)...the max will now be 80%.

In addition, the government will:

- Ban mortgage insurance on properties over $1 million - In other words, you may no longer purchase a property of $1MIL or more unless you have 20% down payment.


These rules are a “judgment call” says Flaherty. They’re meant to “lower risk” for taxpayers and curb excessive household debt, which is Canada’s biggest economic risk.

These are significant changes to Canada’s lending landscape.

May Market Watch Report- May Market Stays Strong, Interest Rates Stay Low

Strong Sales and Price Growth in May
TORONTO, June 5, 2012 –

Greater Toronto REALTORS® reported 10,850 transactions through the TorontoMLS system in May 2012 – an 11 per cent increase over the 9,766 sales in May 2011. Sales growth was strongest in the ‘905’ regions surrounding the City of Toronto.

“Sales growth in the ‘905’ area code was stronger than growth in the City of Toronto across all major home types. While lower average prices are certainly one factor that has contributed to this trend, recent polling also suggests that the City of Toronto’s land transfer tax has also prompted many households to look outside of the City for their
ownership housing needs,” said Toronto Real Estate Board (TREB) President Richard Silver.

New listings were up substantially on a year-over-year basis in May – rising by more than 20 per cent to 19,177. The average price for May 2012 sales was $516,787, representing an annual increase of 6.5 per cent compared to $485,362 in May 2011. Price growth continued to be driven by the low-rise market segment.

“Strong competition between buyers seeking to purchase low-rise home types drove strong price growth in May. However, if new listings continue to grow at the pace they did in May for the remainder of 2012, the annual rate of price growth should begin to moderate on a sustained basis,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.

Jonathan's Opinion

We see here another month of increased sales and prices relative to last year. However, we also see increased listings. Increased listings mean more supply on the market, and more supply can lead to price reductions.

However, in order to have price reductions there has to be significantly higher levels of
supply (Sellers) and significantly lower levels of demand (Buyers). With the Bank of
Canada keeping the interest rate at an all-time low for the 14th time in a row, you can be sure that the level of demand will not decrease any time soon.

This means that the Toronto Real Estate Market will continue being active and will not see any form of correction in the near future.

Rates Stay Where They Are!

The Bank of Canada left the overnight rate unchanged at 1 per cent Tuesday, in the process suggesting a hike may not come anytime soon.


http://www.canadianrealestatemagazine.ca/index.php/news/item/1214-boc-rate-decision-holds-potential-downside


Jonathan's Opinion

I'm sure many people thught that interest rates would undoubtedly increase this year. I'm sure many thought they'd increase last year, or the year before.

As I've mentioned in my monthly blogs, it is easy for the Bank of Canada to say that rates HAVE to go up, but its very difficult, due to global turmoil (especially in the US), to actually increase them.

Rates will not go up this year, and I'd be surprised if they increase next year. To have a significant impact on inflation, rates must at least double...they will not double any time soon.

What this will do is keep an active real estate market. Prices will palteau at these all-time highs, or may even continue increasing marginally. As long as rates remain low, demand will not subside!

One thing I believe for sure, is that if our monetary policies remain the same as they have, a correction is not in the near future.

April Market Watch Report

Market Remains Tight with Sales Up in April

TORONTO, May 3, 2012 –

Greater Toronto REALTORS® reported 10,350 transactions through the TorontoMLS system in April 2012. This level of sales was 18 per cent higher than the 8,778 firm deals reported in April 2011. The strongest sales growth was reported in the single-detached market segment, with transactions of this home type up by 22 per cent compared to a year ago.

“Interest in single-detached homes has been very high, both in the City of Toronto and surrounding regions. Growth in single-detached listings has not kept up with demand, which means competition between buyers in this market segment increased. With this in mind, it was no surprise that the strongest annual price increase was also experienced in the single-detached segment,” said Toronto Real Estate Board President, Richard Silver.

The average price for April 2012 transactions was $517,556 – up 8.5 per cent compared to April 2011. While price growth was strongest for single-detached homes, the better-supplied condominium apartment segment experienced a more moderate annual rate of price growth, at four per cent.

“Monthly mortgage payments remain affordable for home buyers in the Greater Toronto Area. While interest rates are generally expected to increase over the next two years, the extent and timing of rate hikes has been thrown into question by slower than expected economic growth in the first quarter of this year. On net, borrowing costs are expected to remain a positive factor influencing home sales through 2012,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.

Jonathan’s Opinion

The Toronto Market is definitely not showing any signs of slowing down, let a lone correcting. The main reason, as you know, is because of the cheap access to money (low rates). The second reason, as equally important, is the lack of supply on the markets.

Low interest rates and lack of supply will keep this type of market going. There will not be a change in the real estate market activity until there is a change in the monetary policy.

If interest rates remain low (which I believe they will throughout 2012), the housing market will continue being robust, and prices will continue increasing, or will plateau.

They will certainly not correct.



March Market Watch Report. Still Strong!

Tight Market Drives Double-Digit Price Growth

TORONTO, April 4, 2012

Greater Toronto REALTORS® reported 9,690 sales through the TorontoMLS system in March 2012. This result was up by almost eight per cent in comparison to the 8,986 deals reported during the same period in 2011.

“The GTA resale market has not suffered from a lack of willing buyers this year. Buyers have been spurred on by the positive affordability picture brought about by low mortgage rates,” said Toronto Real Estate Board President Richard Silver. “The challenge has been a lack of inventory. Many listings have attracted multiple interested buyers. Strong competition has led to annual rates of price growth well above the long-term average.”

The average selling price in the GTA was $501,614 in March – up by 10 per cent in comparison to March 2011.

“The number of new listings was up last month in comparison to March 2011. However, based on the historic relationship between price and listings, the GTA resale market should be better supplied. If competition between buyers remains as strong as it is right now, we will almost certainly see an average selling price above $500,000 for 2012 as a whole,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.

Jonathan’s Opinion

Some might be wondering what is going in the Toronto Real Estate Market…why is it so
active? Why are properties selling so fast and for so much??

The main reason, as you know, is because of the cheap access to money (low rates). The second reason, as equally important, is the lack of supply on the markets.

Low interest rates and lack of supply will keep this type of market going. There will not be a change in the real estate market activity until there is a change in the monetary policy.

If interest rates remain low (which I believe they will throughout 2012), the housing market will continue being robust, and prices will continue increasing, or will plateau.

They will certainly not correct.

February Market Watch Report. Prices Increase!!

Tight Market Pushes the Average Price above $500K
TORONTO, March 5, 2012

Greater Toronto REALTORS® reported 7,032 sales in February 2012 – up 16 per cent compared to February 2011. New listings were also up over the same period, but by a lesser 11 per cent to 12,684. It is important to note that 2012 is a leap year, with one more day in February. Over the first 28 days of February, sales and new listings were up by ten per cent and six per cent respectively.

“With slightly more than two months of inventory in the Toronto Real Estate Board (TREB) market area, on average, it is not surprising that competition between buyers has exerted very strong upward pressure on the average selling price. Price growth will continue to be very strong until the market becomes better supplied,” said Toronto Real Estate Board President Richard Silver.

“It is important to note that both buyers and sellers are aware of current market conditions. This is evidenced by the fact that homes sold, on average, for 99 per cent of the asking price in February,” continued Silver. The average selling price in the TREB market area was $502,508 in February – up 11 per cent compared to February 2011. The Composite MLS® Home Price Index for TREB, which provides a less volatile measure of price growth compared to the average price, was up by 7.3 per cent compared February 2011.

“If tight market conditions continue to result in higher than expected price growth as we move into the spring, expectations for 2012 as a whole will have to be revised upwards,” said Jason Mercer, TREB’s Senior Manager of Market Analysis. “While price growth remains strong, the average selling price remains affordable from a mortgage lending perspective for a household earning the average income in the GTA.”

Jonathan’s Opinion

Some might be wondering what is going in the Toronto Real Estate Market…why is it so active? Why are properties selling so fast and for so much??

The main reason, as you know, is because of the cheap access to money (low rates). The second reason, as equally important, is the lack of supply on the markets.

Low interest rates and lack of supply will keep this type of market going. There will not be a change in the real estate market activity until there is a change in the monetary policy.

If interest rates remain low (which I believe they will throughout 2012), the housing market will continue being robust, and prices will continue increasing.

ForSaleByOwner Founder Uses Agent to Sell His Condo.

A little ironic, no?

http://realtormag.realtor.org/daily-news/2011/08/09/forsalebyownercom-founder-uses-agent-sell-home

And quite hypocritical.

The Mortgage Crunch

Mortgage Rules to Tighten
by Ratehub.ca

Unless you’ve been living under a rock, you should have heard the Canadian housing market has been causing a stir, both locally and abroad. Mortgage rates in Canada are at record lows and Canadians have taken on more household debt than ever. The word on everyone’s lips is – bubble. The opinions differ on whether or not there really is one, but there are two people whose opinions matter a bit more than everyone else’s. They belong to Jim Flaherty, the Finance Minister of Canada, and Mark Carney, the Bank of Canada Governor. Mark Carney has been expressing his concern for a while over the growing amount of household debt Canadians are taking on. Jim Flaherty is concerned that lenders are loosening their mortgage standards and does not want to head down the same path as the U.S. lending market did. [1]

Recently, the Canadian Mortgage and Housing Corporation (CMHC) announced that it has $541 billion in insured mortgages under its books, drawing it ever closer to the agency’s limit of $600 billion. Theoretically, as the CMHC approaches its cap, it would have to start denying new borrowers or make it much harder to qualify. CMHC insurance is necessary for borrowers that have less than a 20% down payment.

There are three types of borrowers that may be hit the hardest if the CMHC so chooses to tighten the rules:

The Self –Employed: Self-employed individuals are motivated to expense as much as possible to minimise their income for tax purposes. Therefore, it may not be representative of their ‘true income’. Self-employed borrowers with less than three years of business operation can access CMHC-insured financing with a 10% down payment through a Stated Income mortgage program. With a Stated Income mortgage, the self-employed borrower must ‘state’ their earnings to the lender. The risk lies in the similarities to stated income subprime mortgages in the U.S despite being a much, much smaller segment of the market.

New to Canada Immigrants: For New to Canada immigrants, obtaining a mortgage is already difficult since they lack a credit and income history in Canada. In order to qualify for a mortgage, new immigrants will have to provide references such as letters from their home bank and credit card company, or obtain an international credit report. Due to the lack of a Canadian financial track record, immigrants are seen as riskier borrowers, even with these screening tools, right or not.

Condo Buyer: For mortgage applicants looking to finance a condominium, lenders will calculate their borrowing capacity using debt-to-income ratios that include only 50% of condo fees. If the government were to tighten rules to limit the number of borrowers, the condo fee calculation for debt-to-income ratios would likely be raised to 100%.


We still don’t know for sure what actions Ottawa will take, if and when they decide to tighten the mortgage market. If they do, the following borrowers may be left in the dark because they present more risk than traditional borrowers. If the government doesn’t increase the limit on the $600 billion mortgage insurance cap - the CMHC will have to take action and work to reduce the amount of mortgage insurance it issues.

January Market Watch Report

Strong Sales/Price Growth Continue in 2012

TORONTO, February 8, 2012 —

Greater Toronto REALTORS® reported 4,567 sales through the TorontoMLS® system in January 2012. This number was 8.8 per cent higher than the 4,199 sales reported in January 2011. Sales growth was strongest for low-rise home types in the regions surrounding the City of Toronto.

“A favourable affordability picture bolstered by very low posted fixed mortgage rates has kept home buyers confident in their ability to achieve the Canadian goal of home ownership,” said Toronto Real Estate Board President Richard Silver.

“The buyer pool remains diverse in the GTA with strong interest in home types across the pricing spectrum,” continued Silver. The average selling price for January 2012 transactions was $463,534 – up by almost nine per cent compared to January 2011.

“Low inventory levels have kept competition between buyers strong, resulting in robust annual rates of price growth over the last year. Strong price growth is expected to attract more listings. A better supplied market should result in a slower rate of price growth, especially in the second half of 2012,” said Jason Mercer, the Toronto Real Estate Board’s Senior Manager of Market Analysis.


Jonathan’s Opinion

As you can see by the statistics here, the market continues being a Seller’s market, in that; houses are selling fast and for top dollar. However, you can also view this as a market favourable to Buyers because of the low interest rates that lead to affordable monthly mortgage payments.

Low interest rates and lack of supply will keep this type of market going. There will not be a change in the real estate market activity until there is a change in the monetary policy.

If interest rates remain low (which I believe they will throughout 2012), the housing market will continue being robust, and prices will continue increasing.

When is the Best Time to Sell your Home?

Click on video for Jonathan's opinion on what you should consider when deciding when the best time is to sell your home.

Click below for a look at an informative article also:

http://www.propertywire.ca/component/content/article/101-top-tips/1579-best-time-of-year-to-sell-a-house.html

December Market, 2011 as a whole, 2012 Forecast

Second-Best Year on Record for Sales
Toronto, January 6, 2012

Greater Toronto REALTORS® reported 4,718 transactions through the TorontoMLS® system in December 2011. The December result capped off the second-best year on record under the current Toronto Real Estate Board (TREB) boundaries. Total sales for 2011 amounted to 89,347 – up four per cent in comparison to 2010.

“Low borrowing costs kept Buyers confident in their ability to comfortably cover their mortgage payments along with other major housing costs,” said TREB President Richard Silver. “If Buyers had not been constrained by a shortage of listings over the past 12 months, we would have been flirting with a new sales record in the Greater Toronto Area,” added Silver.

The average selling price in December was $451,436 – up four per cent compared to December 2010. For all of 2011, the average selling price was $465,412, an increase of eight per cent in comparison to the average of $431,276 in 2010.

“Months of inventory remained below the pre-recession norm in 2011. Very tight market conditions meant substantial competition between Buyers and strong upward pressure on selling prices,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.

“TREB’s baseline forecast for 2012 is for an average price of $485,000, representing a more moderate four per cent annual rate of price growth. This baseline view is subject to a heightened degree of risk given the uncertain global economic outlook,” continued Mercer.

Jonathan’s Opinion

The following is my 2011 forecast that I wrote last year at this time:

“Because of the market volatility that took place this year, it is difficult to forecast how the market performance in 2011 will be. However, I believe that if interest rates continue to stay low, prices will not correct as they should. I believe we will have a market where there still will be more buyers than sellers, but as interest rates increase (which they will), this ratio will be more balanced. I also think that multiple offers will be very limited. 2011 will undoubtedly be an interesting year!”


The following is what actually happened:

I was right, and wrong (being wrong, however, was not under my control). I said that if interest rates do not increase, then prices will not correct, as they should. That is exactly what happened…interest rates stayed low for all of 2011, and the prices did not correct, or even stabilize…they increased by 8%.

I was wrong when I mentioned that interest rates would go up. I was confident that they would because the Bank of Canada said that they would, more than once. However, because of the volatility of the world markets (particularly the US and Europe), the Bank of Canada did not feel comfortable raising rates. This resulted in more buyers than sellers, more demand than supply, and subsequently, a large increase in prices.


The following is what I forecast for 2012:

I believe that there will be continued fear and volatility in the markets because of the ongoing unrest in Europe and the United States. However I also believe that Canadian interest rates will not be raised this year which will lead to continued demand for real estate. It will be another Seller’s market (high prices) as there will be more buyers than sellers (due to the continued affordable rates).

I don’t think that prices will jump by another 8%, but I do not see them correcting at all. They may stabilize or even increase somewhat.

All this if interest rates remain low and unemployment remains sustainable.

We are in for another interesting year, nonetheless!