Last month I predicted we would have about 4,000 homes sold in February, and I was pretty close. The actual number was 4,120. Historically, January and February sales represent 12.63% of the sales for the year, so it appears that the Toronto and area real estate will have approximately 55,000 homes sold this year to 55,000 buyers for a total of 110,000 sales. Honestly speaking, I believe this number to be very conservative, as the negative frenzy generated by the media created a real sense of dread and fear that resulted in consumers delaying their buying decisions. As the weather warms up and people see that the sky is not falling, normal purchasing habits will reappear, and I believe sales will continue at a higher pace, making up for the slow start to the year.
| Housing Market Indicators | |||
| Feb. 2008 | Feb. 2009 | % Change | |
| Sales | 6,015 | 4,120 | (-32%) |
| New Listings | 11,478 | 10,239 | (-11%) |
| Active Listings* | 18,018 | 21,440 | (+19%) |
| Days on Market | 30 | 45 | (+50%) |
| *All figures for single family dwellings | |||
Watch out for "Sensational headlines!": Average price drops, prices fall 6%, etc, etc, etc. The average price of a home in Toronto/GTA has dropped. It has dropped, because there are fewer expensive homes selling than there were last year, not because homes are worth less. If one home sells for $400,000, the average sale price is $400,000. If next month a home sells for $300,000 the average price is $300,000. It does not mean that a $400,000 home is now $300,000. It's just averages. There are fewer buyers buying, so they can negotiate and get a better price than last year, but certainly not to the extent the media reports. It is that way in certain cities in the United States, and in certain Provinces in Canada, but not in the GTA.
Low interest rates and a growing confidence are spurring more first time buyers to buy, and that combined with continuing immigration create a healthy real estate market. Statistics Canada, reported 247,202 permanent residents immigrated to Canada in 2008, 70,000 more than in 1998. Statistics Canada expects 240,000 to 265,000 new immigrants into Canada in 2009. With a large majority of them settling in Ontario, I see the future of real estate ownership to be very healthy.
If you know of someone thing of buying or selling, please let me know, I would love to help them.
Have a great month!
Fergus
Note: The latest market news can also be obtained through my weblink at www.fergussharpe.com/realestatenews