Toronto Real Estate Market Conditions 2010

January 7, 2011: Real estate market conditions in Toronto in 2010 were far from uniform. Sales were frantic in the first four months, and the prices at the beginning of the year had gains around 20%. Part of the reason, of course, was the fact that these were compared to the slow recession market at the beginning of 2009.

Summer sales were slow, with buyers worrying about the HST, and new government mortgage lending guidelines. Once it was apparent that the HST does not apply to resale properties, and the mortgage rates were kept at the low levels we became accustomed to, market activity improved in the fall.

Real estate sales of existing homes in 2010 were lower by 1% from the number recorded in 2009. Average home price increased by 9% to $431,463, and is expected to grow at at rate of around 5%. With the slower rate of growth, improving economy, and low interest rates, mortgage carrying costs are expected to remain affordable for average income earning household.

Median price in December was $355,000, up from $349,000 recorded in December 2009. The market is stabilizing, and it takes more time to sell a home. Existing home sales are in line with some of the best years on record, and strong sales are recorded throughout the various property classes, from those affordable for the first time buyers to luxury homes. As in October and November, almost three quarters of sales recorded in December were properties between $250,000 and $750,000. 24% of these sales were condo apartments and 6.3% were condo townhouses.

Fewer listings are coming up and even though the sales are a bit slower, it is still difficult to find a suitable home. Central districts experienced serious shortages of listings this year. Looking forward to the coming year we hope for more inventory, as the home owners react to the price growth and strong sales.

In December average sale to list ratio was 98% in the central and east districts, and 97% in the west and north districts. Average time required to sell a property was 38 days in central, 27 days in the east and west, and 40 days in the north districts.

Toronto real estate market remains strong and the percentage of sold listings is still above the norm for a stable market and far from the level at which prices tend to fall.

Last quarter sales of freehold homes in the Greater Toronto Area were as follows:

In October:

Area	Number of sales	100% of asking	over 100% of asking
Central	1278	153	154
East	1471	143	148
West	2733	202	147
North	1452	124	99

In November:

Area	Number of sales	100% of asking	over 100% of asking
Central	458	41	99
East	1058	92	120
West	1610	147	117
North	1058	89	82

In December:

Area	Number of sales	100% of asking	over 100% of asking
Central	213	15	34
East	684	67	68
West	948	79	68
North	639	59	33

The following graphs illustrate the performance of Toronto real estate market since 2006.

The graph above shows the percentage of active listings that sell each month. Shaded area delineates a stable market. If the sales drop below that area, real estate prices fall. During the last five years we have experienced such situation only in the last quarter of 2008.

Looking at the graph illustrating the average monthly prices we notice not only the differences year-over-year, but also seasonal changes.

Graph above shows the number of active MLS listings in Toronto as it changed over the last five years. 2010 started with very low inventory. In the second quarter the inventory increased until May, then gradually decreased to levels that are lower than in 2006 - 2008.

If you have questions regarding current Toronto real estate market, I will be glad to help. Please e-mail me at [email protected] or call mt office at 416-481-6137.