Is now a good time to sell?
What’s happening in the Toronto real estate market?
I am asked these questions on a daily basis so I thought that this might be the forum to have others who might be interested hear my response. My recommendations to my clients are always backed by appropriate facts and rationale.
Total real estate sales for Toronto in 2011 amounted to 89,347 – representing a 4% increase relative to 2010. Three major factors – borrowing costs, supply, and demand – contributed to the second highest sales year on record for the Toronto Real Estate Board.
Uncertainty surrounding the global economy in 2011 led to the Bank of Canada holding off talks of any interest rate increases – so, the resulting low borrowing costs kept Buyers confident in their ability to comfortably cover their mortgage payments along with other major housing costs. I’m sure you noticed the 2.99% mortgage promotion that BMO is offering. The other banks also followed suit.
The current Toronto real estate market outlook is extremely strong for sellers. The months of inventory for the Toronto Real Estate Board (calculated by looking at the past 12 months listings versus the past 12 months sales) is 2.2 months. Months of inventory remained below the pre-recession norm in 2011. Very tight market conditions meant substantial competition between Buyers and strong upward pressure on selling prices. This means we are firmly entrenched in a seller’s market. A balanced market is anywhere from 3 to 5 months of inventory. Once inventory levels reach over 5 months, we are into a buyer’s market.
What I can also share with you is what I witnessed in the Toronto market during 2011, and that is: unbelievably pent-up demand and a significant drop in housing supply. The GTA has on average, 100,000 immigrants annually. Add this to the mix, and I only see long-term appreciation for a city that is now considered internationally as a safe haven. Real “incremental” demand continues to fuel Toronto’s real estate market.
All of this to say that factors in Toronto are extremely strong – low supply levels resulting in even greater pent-up demand, and continued affordability as evidenced by low interest rates.
Those buyers who heeded the experts, in an attempt to ‘time the market’ were the big losers once again. Timing the market is the absolute worst strategy. If buyers sit on the sidelines and the market keeps rising, they lose significantly. Don’t panic over newspaper headlines. Make an informed decision. Run your own numbers.
If you’re thinking of selling and would like to be informed of recent sales in your area and to be kept in the know, call me on my direct line at 416-315-2565 or email me at [email protected]