October continued to be another great month for sales in Toronto and the GTA, as the members of the Toronto Real Estate Board reported the sale of 8,476 single family homes, up 64% from October 2008. The average price for October transactions was $423,559, up by 20% compared to the same month last year.
| Housing Market Indicators | |||
| Oct 2008 | Oct 2009 | % Change | |
| Sales | 5,155 | 8,476 | (64%) |
| New Listings | 14,530 | 11,532 | (-21%) |
| Active Listings* | 27,277 | 14,771 | (-46%) |
| Days on Market | 37 | 26 | (-30%) |
| *All figures for single family dwellings | |||
As much as I would like to say your home went up 20% that would not be a factual statement. What caused the spike in the average price was that more expensive homes sold this October than a year ago. The highest rate of sales growth was in properties selling for over $750,000. That is what raised the average price for the month. 614 properties sold in excess of $750,000. Low interest rates, uncertainty in the stock market, negligent returns on savings accounts and term deposits encouraged people to increase their investments in real estate and that includes buying larger homes.
The real news is that the average home price has increased by $12,917 year over year and now stands at $392,264 almost 3% above last years $379,347. Looking at this in a different way, if you had purchased a home with $75,000 down payment and it increase by $13,000, that would represent a 17% return on your $75,000 investment, much better than the stock market and….you got to enjoy your home!
November’s news will be much the same as a shortage of homes and many eager buyers will continue the trend of record numbers of sales and increased prices. A common question I get is, is it too late to buy? Have prices gone up too much and should I wait for them to fall before I enter the market? We have tracked home prices since 1970 when they were $29,492. I am sure there are people from 1970 still waiting to buy when prices come down. As the population increases, demand causes prices to increase. Over a long period of time, you cannot make a mistake buying a home. If you want to speculate, buy today and sell tomorrow, that is a risky business. For the long term investor or the home owner who plans to live in the home 5-10 years there is no better investment than real estate.
The best time to buy real estate was yesterday, the second best time is today.
Call me if you have any questions, I would love to talk to you.
Fergus