Tweet2011 ended strong, with the Toronto Real Estate Board reporting 4,718 residential properties sold for the month of December. This represents a 10.1 percent increase compared to the 4,286 properties reported sold for the same month in 2010. The market landscape remains unchanged. Historically low mortgage interest rates and strong buyer demand fueled the Toronto resale market throughout 2011.
As forecast, 2011 proved to be the second best year on record, behind only the 93,193 residential properties reported sold in 2007. The 4,718 sales for December brought the total sales for the year to 89,347 properties sold. The next best year for reported sales was 2009, with 87,308 properties sold. By all accounts 2011 was an exceptionally strong year.
In December 4,811 new listings came to market. This represents a 13.8 percent increase compared to the 4,229 new properties that came to market in 2010. The new properties that came to market in December brought the total number of properties available for sale for the beginning of 2012 to 12,868, up 14.9 percent compared to the same period last year. Notwithstanding the increase in both new listings and properties available for sale in December, the 12,868 properties available to buyers to start the NewYear is still a historically low number.An inventory of 12,868 properties represents 2.2months of supply. A balanced market is between 3 and closer to 4months of supply.As a result it is anticipated that well priced properties in sought after neighbourhoods will attract considerable competition as the NewYear begins. The unusual warm winter weather we have been experiencing in early January should also act as a market catalyst.
Average days for properties on the market rose in December from previous months. This is not unusual, as December and January are historically the two slowest months in the market cycle. In December all new properties (on average) coming to market took only 32 days to sell. These numbers represent the speed of sales in the entire greater Toronto area. In the City of Toronto the pace was a little faster at only 30 days. On a district-by-district basis, properties in Toronto’s west end took 31 days to sell, 31 days for central properties, and a jaw dropping 27 days for all east properties. The in –demand neighbourhoods continue to be trading areas just east of Toronto’s central core. In particular Riverdale and Leslieville are markets that appear to be on fire. Even in December average days on market for these neighborhoods was only 15 days. No other trading areas in the central or western districts equaled the pace of sales in theses districts.
Although it may be too early to forecast, it would appear that headed into 2012 the pace of sales, at least for the market as a whole, may be slowing. In September and August average days on market for properties was 27days. In October average days came in at 26. In November average days increased to 29. It increased again in December to 32. Notwithstanding this slight slow-down, 32 days on average for all monthly sales continues to be very brisk by historical standards. For example, last December all properties took 37 days to sell.
In December the average sale price for all properties sold was $451,436, down by 6 percent from the sale price of $480,421 achieved in November. The decline in December is common in the annual market cycle. Over 191 properties with a sale price in excess of $1 Million were reported sold. 24 of these properties had a sale price in excess of $2 Million. Conversely of the 4,718 properties sold, 1,258, or more than 26 percent, had a sale price between $300,000 and $400,000. December’s average sale price of $451,436 represents a 4 percent increase compared to the $433,523 average sale price achieved in December 2010.
Forecasts for 2012 are mainly positive. The Toronto Real Estate Board and Canada Mortgage and Housing Corporation’s view is that because of broader economic conditions prices will increase moderately accompanied by slightly lower sales. Sales should see about 85,000 properties sold, and prices will increase over the year by a modest 4 percent. In 2011 prices increased (annualized) by 8 percent, from $431,276 2010 to $465,412 this year. Toronto has managed to avoid the housing market pit falls that have plagues many other jurisdictions, particularly the United States.Markets in the States have been in decline since 2005. If the forecast for 2012 proves accurate, and there is every reason to believe they will, we will enjoy a strong market, punctuated by moderate price increases, which in conjunction with low mortgage interest rates will ensure continued affordability.
By: Chris Kapches, Senior Vice-President, Chestnut Park Real Estate Ltd.
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