The Toronto Real Estate Board reported a record 10,955 homes sold in June, up 27% from June 2008. The unprecedented demand for home ownership over the last 3 months has led to a continual increase in prices, culminating with June’s record breaking average sale price of $403,972. The average home sale price in 2009 now stands at $383,710, up 1.6% over 2008.

While a 1.6% increase over 6 months might not seem like much, it is significant considering that prices were expected to drop 3%-5% in 2009 due to the economic downturn. The real estate market continues to be strong. All of the reasons for not buying before (economic downturn, unemployment, and recession) seem to have been forgotten, and its business as usual both in the real estate market as well as the stock market.

This unexpected demand for homes has dropped the inventory of available homes from 23,500+ in April to 18,704 as of the end of June which will continue to result in bidding wars and increasing prices. Even though the spring market (the strongest part of the year for real estate sales) is now over, the strong sales will continue until July, but not at the same level as in June.

Low interest rates are adding fuel to the real estate market in two ways. One, monthly payments are cheaper so more people can afford to buy and to buy more expensive homes. Two, with term deposits earning 0%-0.5% return, many people are choosing to put that extra money into upgrading their home.

I believe that this may be an opportune time for anyone considering upgrading their home. It’s a good time to sell to get maximum value for the existing home and a long closing date allows one to find the new home in the summer/fall market when the demand and competition of the spring market has lessened.

If you or someone you know would like more information, please give me a call. And by the way, I’m never too busy for your referrals.

Fergus