Real Estate Toronto Canada

Toronto real estate market activity for October 2009

There were a record 8,476 sales of houses and condominiums during the month – up a not-surprising 64% from 2008. Of course one year ago the world was imploding and every market was hitting bottom. Howver we are still up 561 sales over October of 2007 which was a record year.

The ratio of sales-to-listings for the month was 58.8% – on a par with June in the spring market. This is mainly due to the exceedingly small inventory of listings. There were approximately 15,000 listings during the month where this time of year we typically have 20,000 to 24,000 houses and condos available for sale.

The average sale price for homes across the GTA was $423,559, the highest it’s ever been. A big driver of this increasing average was the move-up buyer purchasing larger, more expensive homes. However the average sale price year-to-date is up only 3.6% over the same period in 2008.

Resale condominiums maintained their 31.6% share of the market, slightly higher than earlier in the year but less than during the third quarter of this year.

I have heard through the ‘appraiser grapevine’ that banks have been repossessing more homes in the last six months than they were previously. Still that number is nowhere near the foreclosures taking place south of the border.

Our Team has been fielding quite a few calls recently from past clients who are now looking to move up to a bigger house or to switch from a condo over to a semi- or detached home. If that trend continues across the board, more listings should be appearing over the next several months. We have a ‘chicken or the egg’ problem though… in this low-inventory market, people need to buy first before they sell. If they can’t find something, they don’t list their home thereby contributing to the lack of listings problem.

Advice to buyers today is certainly to buy first if you already own a home. Several of our clients have endured the manufactured multiple offer situation caused by listing agents pricing their homes artificially low (usually by $50,000 or more). This wastes an incredible amount of everyone’s time and is expensive for the buyer who needs to pay for a home inspection prior to putting in their offer.

Average Toronto Sale Price to October 2009

If this will be your first home, every buyer needs to make 100% sure their financing is in place prior to putting in an offer. This is always good advice BUT even more so today when a buyer needs to go in firm when they’re in competition with other buyers for the same condo or house. Get in writing what we call a Full Mortgage Pre-Approval where you supply your lender proof of income (employment letter, Notice of Assessment from Revenue Canada and a current pay stub), proof of down payment (GIC or term deposit, RRSP statements or print-out from your bank account) and get a credit bureau done.

Then your lender should give you a letter stating the maximum amount of mortgage you qualify for (you may not go that high but better to know what your parameters are), the interest rate they’re guaranteeing, the length of time the rate guarantee is good for and the phrase “NO Conditions” except for an appraisal.

By the way, buyers with low 5% or 10% down payments need to be cautious when entering into multiple offers that they don’t get carried away in the ‘heat of the action’ and end up overpaying. If the bank’s appraisal comes in lower than the purchase price, there’s going to be a big problem on closing day!