The market has certainly rebounded strongly from a year ago with the sale of 4,986 single family homes, marking it one of the best Januarys in the history of the Toronto Real Estate Board.
| Housing Market Indicators | |||
| Jan 2009 | Jan 2010 | % Change | |
| Sales | 2,670 | 4,986 | (87%) |
| New Listings | 10,360 | 10,021 | (-3%) |
| Active Listings* | 20,450 | 12,052 | (-41%) |
| Days on Market | 49 | 28 | (-43%) |
| *All figures for single family dwellings | |||
Houses that were $250,000 ten years ago are now $500,000 and it's hard to adjust to such strong price increases. I keep reading reports on how "affordable" Toronto real estate is and part of me wonders about the affordability of a $500,000 home. Remember the facts and they are:
- Abnormally low interest rates makes houses affordable. An increase of 3% in mortgage rates (would still be a low interest rate considering 10%-14% in the 80's and 90's) on a $350,000 mortgage represents an increase of $1000 per MONTH in mortgage payments. That's $1000 per month more for the same home!
- Low construction costs. New condos are being sold for $400-$500 per square foot
- Availability of homes. The construction of new homes and condominiums continues to keep the price of homes rising at a gradual pace, allowing first time buyers to enter the market
It's hard to get past the prices of the "past", but it is an excellent time to buy. Chances are the growth of the last 10 years will continue into the next ten years as inflation, the availability of building lots, and demand will continue to increase the price of homes in the Toronto and the GTA.
If you are thinking of making an investment in real estate, now is a great time!
Give me a call and let's talk!
Fergus