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Toronto real estate market in decline
GTA Realtors Report Monthly Resale Housing Figures.
Greater Toronto Realtors reported 6,564 sales in July, a 34 percent drop from the record 9,967 sales reported in July 2009. New listings, at 10,825, dropped to the lowest level for the month of July since 2002.
The level of July sales remained below the expected long-term trend. "The market has become more balanced following record monthly sales through most of the winter and early spring," said Toronto Real Estate Board (TREB) President Bill Johnston. Total sales through the first seven months of 2010 were up by 12 per cent compared to the same period in 2009.
Notwithstanding the fact that price trends vary at the neighbourhood level in GTA, the average price for July transactions was $420,482, representing a six per cent increase over July 2009. Over the first seven months of 2010, the average selling price was up 12 per cent annually to $432,253.
"Market conditions promoting annual growth in the average selling price have remained in place. While July sales were down compared to last year, the number of new listings in the marketplace also fell. This means there was enough competition between buyers to exert upward pressure on price", said Jason Mercer, TREB's Senior Manager of Market Analysis.
See Toronto Real Estate Market Watch »
August 5, 2010 in Toronto Real Estate Update | Permalink
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Comments
Handled either directly by the owner or by a property tax consultant,this process should involve an intense effort to annually appeal and minimize property taxes.He tells me realtors in the industry are having daily meets on how to spin all the bad news as positive.
Posted by: electric guitars | Jan 9, 2011 11:15:55 PM
Have Faith Torontonians
perhaps the market may have cooled.. and prices have fallen a bit... but they should have.. they were WAY too HIGH months back. I advised my clients to be sensible about what they purchased and to not get caught up in the bidding war frenzie. Not to Mention that we have 10,000 + people moving into Toronto every year.. Our Market is Stable.
I suggest you visit this link to learn a little more about Homes in Toronto and why we have an awesome market
http://www.youtube.com/watch?v=HTQHPjy_6Fg
Posted by: Danielle | Sep 13, 2010 9:46:37 PM
Many investors in Toronto real estate try to unload their properties on the market when prices start to decline
Posted by: Cash For Houses | Sep 13, 2010 9:59:47 AM
Great write up indeed!
With the housing market going from bad to worse many realtor will be forced to find real employment. Many states are already experiencing the same situation. With the trend being in shown in real estate sales data, it is most likely to last longer than expected. Let's just hope Toronto real estate growth will bounce back in 2011.
Posted by: DavidLeeman | Sep 7, 2010 2:56:15 AM
Fortunately, the property tax appeal process in Texas provides owners multiple opportunities to appeal. Handled either directly by the owner or by a property tax consultant, this process should involve an intense effort to annually appeal and minimize property taxes. Reducing the largest line item expense has a significant effect in reducing the owner's overall operating expenses. While it is not possible to entirely escape the burden of paying property taxes, it is possible to reduce taxes sharply, often by 25% to 50%.
Posted by: GreenlightProperties | Aug 29, 2010 12:13:42 AM
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Posted by: Estate Agents Manchester | Aug 27, 2010 5:30:45 AM
@ Phil - interesting post.
I don't get the 'greed' hatred though. That's what capitalism is all about. It's not greed to list your house for as much as you can get just as it's not greed to get the most you can get - as you say, "Frankly, I want the best buck my money can afford." It's what you're supposed to do. Buy low, sell high.
It's however STUPID to put a listing price that's totally out of whack with reality, just as its stupid to go to Rosedale and offer $5,000 for a 100 year old mansion.
Posted by: Geoff | Aug 16, 2010 5:38:35 PM
My advice to first time home buyers is to wait, wait, wait....until you find the right home at the right price. What we're seeing now are homes that are being listed on the MLS for 2 sometimes three months. These are homes that would have been snatched up a lot sooner....but who ware stubborn to lower the prices to what they should really be.
I've been researching the market in Toronto and GTA for about 6 months and what I've found is that not all prices have come down....however, those sellers eager to make the sale must come down - especially if turn time is a factor. If you're a seller, your best strategy is to price your home lower - otherwise you risk being forced to do so months later when everyone does.
But we still live in a world of Greed:
I was searching the paper a few weeks ago and came across a property that I believed was underpriced given the sentiment but adeuately priced given that it was a two bedroom bungaglow with lots of stuff to do. What I found was horrendous. The agent told me she was not taking any offers until the 19th. Whey questioned why she shrug it off by saying that some key relatives were coming to town. I told her I would give her what she was asking....."sorry." she said. What?? Why would she be sorry and why wouldn't she want to make the fast sale? It turns out that this was a gimmick that would see a house priced low and would work to pit buyers against themselves in a price war. Well needless to say I didn't purchase the house and moved on. The house did sell but for LOWER than the asking. I think buyers are tired of these shenanigans and are not prepared to fuel the greed that has been behind the housing bubble in Canada.
What prices should houses list at?
The listing price that is killing so many buyers and that is working to cripple the future economy is currently factoring in the cost of borrowing. Interest rates are low therefore I can afford more home. This pricing is based on a greed principle that states I will sell now and everyone beware. Frankly, I want the best buck my money can afford.
But in reality, this incredibly devious trick to create a mass purchasing frenzy comes with it’s cost. This cost is based on the principle that interest rates change based on inflation.
Inflation can be described as the power of your one dollar to purchase items. It is related to the Consumer Price Index or CPI. Now the CPI measures the percentage increase of basic commodities through a pegged year. The pegged year is normally a year in which the economy for that country performed exceptionally well. Now the list of these commodities is entirely at the discretion of the nation's economic managers. Why? Because the world is full of different cultures. Some cultures are heavy rice eaters, while others prefer corn. Some are heavy wheat consumers, while others aren't. What is a basic commodity in your country may not necessarily mean that it applies to another.
Anyway, back to inflation. When prices increase, your dollar gets to buy less. Over time, prices tend to steadily increase. Hence, your one dollar today is not necessarily equivalent in value to your one dollar tomorrow. A case in point: if you could buy four comic books with your one dollar when you were younger, guess what, Batman? You can't even buy one these days at that price. That is inflation.
So how is this related to interest rates? Investors, try to preserve the value of their money by investing in activities that have yields that are either equivalent or higher than the inflation rate. Let's say that the local interest rate is pegged at 6.5%; the money that you earn, save and invest, should be able to at the very least, match that rate. Why, because at the end of the year, if your money stayed inside the piggy bank, its value would've been eroded by that rate. So if you save 100 dollars at the start of the year, at the end of the year its worth would've been shaved by $6.50 leaving your $100 worth only $93.5.
Posted by: Phil | Aug 16, 2010 1:35:04 PM
@ Frank - oh and I forgot, please stop accusing people of being realtors just because they don't tell stories of losing $10 million dollars on a house in the projects.
Frank where's your alleged house (cross-streets, please) and what did you pay for it? photos, realtor listing sheets? Oh wait you won't be able to provide those, because you just like the anonymity of the internet and make ridiculous, unsupported statements. Whatever.
Quite frankly, if you blame realtor or anyone other than yourself for getting into a mess in 3 months (!) than you're a really, really, big idiot. I expect your response to not include any detailed factual information, please disappoint.
Posted by: Geoff | Aug 15, 2010 6:56:33 PM
Geoff is a worried realtor? Realtors are true scum. Thanks to a realtor bad advise I am now underwater on my mortagage after three months of buying my home. Prices in the GTA have dropped 5-6% in the last couple of months and when you factor Realtor fees , closing costs i will be down 10%. Even my friends are trying to bail out of RE. Realtors only look out for themselves since they profit only when they sell.
Posted by: Frank | Aug 15, 2010 10:26:44 AM
I just sold my house for 300% above asking; it's located at jane/finch and I did'nt even have to clean the bullet holes in the drywall...
@ PO'd and others who tell stories without citing proof: can we all knock it off and if you have actual information on what you're doing, provide some evidence? IE If you say you have a listing that can't sell, include the MLS # of the listing. If you have an uncle who says real estate is a death trap, include a link to his realtor site. Otherwise it's hard to tell if this is an odd attempt at a self fullfilling prophecy by a bunch of doom and gloomers, or really the early signs of an actual correction.
Posted by: Geoff | Aug 15, 2010 9:20:45 AM
That's a great post and I really agree with some of the comments!
Posted by: Land Estate Reviews | Aug 13, 2010 1:22:06 AM
Looks like people are waking up to Canada's housing bubble and crash. Houses are not selling and people seem worried they won't be able to sell. Everywhere you go the talk is all about how so and so house is still on the market or so and so just lowered their price again and still no buyers. Looks like the start of a US housing crash. Don't forget that the realtors in the US said prices won't crash or just stay flat. We all know how that turned out.
Posted by: Dave | Aug 12, 2010 10:20:44 PM
It's hardly a crash, there's just way too much inventory on the market and not enough people are willing to buy. It's an adjustment.
Posted by: malcolm johnston | Aug 12, 2010 4:39:45 PM
PO'd - what's the MLS # of your listing?
Posted by: Geoff | Aug 12, 2010 9:42:06 AM
Talk at work is all about the real estate market. Alot of the talk is with "investment" condo's as they took a LOC from their house to buy a condo where they can flip for a profit. The problem with that is tens of thousands of others had the same idea. This down turn in the real estate market will be bad but I would peg it at 20-25% in a couple of years.
Posted by: Davin | Aug 10, 2010 5:34:36 PM
Don't be mad "pissed off" since you have no one to blame but yourself. My uncle is a good and honest realtor. From what my uncle tells me is that the housing crash will continue to get worse. He tells me realtors in the industry are having daily meets on how to spin all the bad news as positive. My uncle doesn't think these lies will stop the housing market from falling back down to normal levels. He thinks 30-35% in a few years should be the bottom. Average home in the GTA is $420,000 and the projected housing crash 30%($126,000) so we should see $300,000 for an average home. I know alot of people maxed out on credit and debt who will be forced to sell.
Posted by: Pissed off | Aug 10, 2010 3:13:32 PM
My home just won't sell and this even after lowering my home to the lowest in the area. I feel like all the sellers are in a selling war as we each try to out do each other. I knew to sell my home four months ago before the bubble popped. I need to sell but how much lower do I have to go?
Posted by: Pissed off | Aug 10, 2010 12:57:43 PM
I did not want to leave this message here but saw now place to be able to send you an email. I was hoping you would take a look at my blog and add it to your blog roll. The address is http://massrealestatenews.com
Thanks!
Posted by: Bill Gassett | Aug 9, 2010 10:54:15 PM
Here's to hoping that this turns around soon. I thought we'd be bouncing back a little by now!
Posted by: Home Mortgage Kansas | Aug 9, 2010 11:56:17 AM
Great blog! For information on the Vancouver Real Estate market, check out mine.
Posted by: Jules Seaman | Aug 7, 2010 9:04:12 PM
Why do we continue to make such bad real estate choices? As with the economy we pretend that we are rational when it comes to complex issues. Urban planning, real estate are complex issues where, as many decision scientists have pointed out, we are poor at figuring out.
http://qedrealestate.wordpress.com/2010/08/06/why-do-we-make-such-bad-real-estate-choices/
Posted by: QED Real Estate Consulting | Aug 6, 2010 11:21:57 AM
As noted by takloo, the price decline on a monthly basis is pretty substantial. $435k in June to $420k in July? That's a pretty big price difference! Why do they keep comparing the prices to the 2009 year? It makes it seem like the market is still growing when, really, it's not.
Posted by: Marz | Aug 6, 2010 11:18:43 AM
I think real estate prices will fall 250%. 35% drop off? Thinking small my friend. Actually the government will give everyone mansions in rosedale in 2013.
Posted by: Geoff | Aug 6, 2010 10:24:32 AM
One thing I do not understand - In April the everyone wanted the market to cool down. Lot of actions were taken. Now after 4 months it is down - because the avg. closing time is 3 months for a buyer. It should be a big surprise.
Posted by: Sudip Adhikari | Aug 5, 2010 10:17:14 PM
