Monday, July 7, 2014

July Market Watch - Interest Rates too low! But can't be increased as simply as we think!

Strong Growth in June Sales
TORONTO, July 7, 2014 –

Stepping into his role as President of the Toronto Real Estate Board, Paul Etherington announced a strong increase in residential sales reported through the TorontoMLS system in June. Sales were up by 15.4 per cent year-over-year to 10,180 transactions. New listings were also up compared to the same period in 2013, but by a lesser annual rate. This means that competition between buyers increased in June.

“Home buyers in the Greater Toronto Area are confident in their ability to purchase and affordably pay for a home. Generally speaking, buyers feel that ownership housing will be a good investment over the long term. This is why we continued to see increases in home sales in June for all major home types across the GTA. Given the degree of pent-up demand in the market today, I would expect to see sales growth continue through the summer,” said Mr. Etherington.

The average selling price for June transactions was $568,953, representing an increase of 7.4 per cent compared to June 2013. The strongest price increase for the GTA as a whole was for semi-detached houses, with the average price up by 9.7 per cent year-over-year. The pace of price growth for condominium apartments was also strong at 6.8 per cent.

“With less than two months of inventory in many parts of the GTA, it makes sense that we continued to experience very strong price growth in June. This is especially the case for low-rise home types like singles, semis and townhouses.

Strong price growth for these home types will continue through the remainder of 2014. Despite higher inventory levels, the condominium apartment market segment has benefitted from enough buyer interest to result in above-inflation price growth,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.

Housing Market Indicators
 
June '13
June '14
% change
Sales
8,821
10,180
15.4
New Listings
15,458
16,735
8.3
Active Listings
22,205
20,686
-6.8
Days on the Market
24
22
-8.3
PRICE
$529,614
$568,953
7.4

 

 

 

My Opinion
These numbers illustrate clearly that Demand is still stronger than Supply in the housing market, and that home prices continue to increase because of this. Demand will always be higher as long as borrowing costs (interest rates) stay low. Economists are anticipating an increase in interest rates to be implemented sometime in 2015. They’ve been saying this since 2011…we’ll see what happens.

Increasing interest rates is easier to say than to do, because many things will be affected…I talk more about this in my video (above). Have a watch!

Wednesday, May 7, 2014

Crazy Market Ongoing...Why Use a Realtor!

Tight Market Conditions Prompt Strong Price Growth
TORONTO, May 6, 2014 –

Toronto Real Estate Board President Dianne Usher announced that during April – the first full month of spring – Greater Toronto REALTORS® reported a 1.8 per cent year-over-year increase in sales through the TorontoMLS system. Total April 2014 sales amounted to 9,706, compared to 9,535 transactions in April 2013.

“April marked the beginning of the spring market, during which time we generally see the highest monthly sales totals in a given year. Despite the persistent shortage of listings, a substantial number of GTA residents were able to come to terms on a home that met their needs. However, sales levels would have been higher, but for the lack of supply,” said Ms. Usher.

“A number of factors underlie the constrained supply of listings. Studies and polling suggest that the additional upfront land transfer tax in the City of Toronto has prompted some households to stay put and renovate rather than list their home and move. In the broader GTA context, above-trend home sales in the years leading up to the recession have meant that many households who purchased during this period simply aren’t ready to move again,” continued Ms. Usher.

The average selling price for April 2014 sales was $577,898 – up by 10.1 per cent compared to the April 2013 average of $524,868. The MLS® Home Price Index (HPI) Composite Benchmark was up by seven per cent year-over-year. The MLS® HPI strips away price fluctuations resulting from a change in the mix of home types sold from one period to the next.

“Price growth for the GTA as a whole was driven by the single-detached, semi-detached and townhouse market segments in the City of Toronto. So far this year, there has been no relief on the listings front for these home types in many neighbourhoods in Toronto and surrounding regions. Until we see a marked and sustained increase in listings, we should expect to see the annual rate of price growth above the long-term norm,” said Jason Mercer, the Toronto Real Estate Board’s Senior Manager of Market Analysis.

Housing Market Indicators
 
April '13
April '14
% change
Sales
9,535
9,706
1.8%
New Listings
18,160
17,315
-4.5%
Active Listings
20,866
19,118
-8.4
Days on the Market
23
20
-13%
PRICE
$524,868
$577,898
10.1%

 

 

 
 
My Opinion

The housing market is a perfect illustration of the law of supply and demand. These numbers show that there are still more Buyers (demand) than Sellers (supply) out there, and therefore, home prices continue to increase. Demand will always be higher as long as borrowing costs (interest rates) stay low. Economists are anticipating an increase in interest rates to be implemented sometime in 2015. They’ve been saying this since 2011…we’ll see what happens.

Thursday, March 27, 2014

Bidding Wars May Lead to Mortgage Problems


Explanation of how Buyers must be careful when bidding on a house. If they offer SIGNIFICANTLY more than what their mortgage provider appraises the house at, they may not get the mortgage they seek.

Call me, email me, comment here if you'd like more information on this.

Wednesday, March 5, 2014

March Market Watch - Sales and Prices Up!

Toronto MLS Sales Up in February
TORONTO, March 5, 2014 –

Toronto Real Estate Board President Dianne Usher announced that February 2014 home sales reported by Greater Toronto Area REALTORS® were up by 2.1 per cent compared to the same period last year. Total February sales amounted to 5,731 compared to 5,613 last year.

“Despite the continuation of inclement weather in February, we did see a moderate uptick in sales activity last month. The sales increase was largely driven by resale condominium apartments. New listings of resale condominium apartments were up on a year-over-year basis, giving buyers ample choice. This is in contrast to the listings situation for singles, semis and townhomes, where supply continued to be constrained. Some would-be buyers had difficulty finding a home that met their needs,” said Ms. Usher.

“If we see renewed growth in listings for low-rise home types, the pace of sales growth will accelerate as we move through the year,” Ms. Usher continued.

The average selling price for February 2014 sales was up by 8.6 per cent to $553,193, compared to the average of $509,396 reported for February 2013. The MLS® Home Price Index (HPI) Composite Benchmark was up by 7.3 per cent year-over-year.

“While the strong price growth experienced over the last year should prompt an improvement in the supply of listings, sellers’ market conditions will continue to prevail this year. Home prices, on average, will trend upwards at a pace well-above the rate of inflation. The impact of strong price growth on affordability will be mitigated by low borrowing costs,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.


Housing Market Indicators
 
Feb '13
Feb '14
% change
Sales
5,613
5,731
2.1%
New Listings
11,005
10,897
-1.0%
Active Listings
15,969
14,019
-12.2%
Days on the Market
28
26
-7.1%
PRICE
$509,316
$553,193
8.6%









My Opinion

These numbers illustrate that even with these poor weather conditions, there are still more Buyers than Sellers out there. As the weather gets better, there will be more properties listed and even more Buyers will spring up to take advantage of these ultra-low mortgage rates, especially now that CMCH has implemented new policies (http://www.cbc.ca/news/business/cmhc-hikes-mortgage-insurance-premiums-1.2555076).
In the coming months, sales, listings, and prices will increase.

Monday, February 10, 2014

February Market Watch - Sales Down, Prices Up!


Average Selling Price Up Strongly in JanuaryFebruary 5, 2014 -- Home ownership in the Greater Toronto Area remains affordable and there are many people looking to purchase a home. In January, the number of homes listed for sale was down quite strongly compared to last year, which means that it was difficult for some buyers to find a home.

Greater Toronto Area REALTORS® reported 4,135 sales through the TorontoMLS system in January 2014. This result was down by 2.2 per cent in comparison to January 2013. New listings entered into the system were down over the same period by 16.6 per cent to 8,822.

“Looking forward, it is possible that strong price growth, and therefore an increase in home equity, will act as a trigger for more households to list their homes for sale. This is especially the case for households whose life styles are changing, including those with an expanding family looking for a larger home or empty nesters looking to downsize,” said Dianne Usher, President, Toronto Real Estate Board.

The average selling price for January 2014 sales was $526,528 – up by more than nine per cent compared to $482,080 in January 2013.

“The pace of price growth will remain strong in 2014. Similar to last year, competition between buyers for singles, semis and town homes in the City of Toronto and surrounding regions will continue to exert upward pressure on selling prices. At the same time, mortgage rates will remain near historic lows, so despite strong price growth, home ownership will remain affordable for the average household in the GTA,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.


Housing Market Indicators
  Jan '13 Jan '14 % change
Sales 4,229 4,135 -2.20%
New Listings 10,577 8,822 -16.60%
Active Listings 14,231 11,903 -16.40%
Days on the Market 37 36 -3%
PRICE $482,080 $526,528 9%

My Opinion
Sales are low because listings are low. Not many houses for sale in January. Notice prices are higher though. This will be another year of high demand due to the fact that interest rates are set to remain at historically low levels for at least this whole year. This is enticing Buyers that would otherwise wait for a “cooling” market to enter now. People’s beliefs are that if they don’t enter the housing market now, and prices keep climbing, they will be priced out.