November market commentary

We are presently going through a correction phase in our Toronto and Canadian real estate markets that is spawning all types pf press and forecasts of a more moderate market ahead, and even more about doom and gloom. Even when there is a nugget of bright news, it often gets buried or written in such an obscure way that most people just miss it altogether.

In my opinion, there are a number of important items to be aware of today and for the coming markets.

*First, the current 'weakness' is comparing against a very strong post recession recovery last year. Total sales for this year will be the third highest level of sales ever recorded for the Toronto GTA market.

*September and October both followed the seasonal pattern of increasing from the previous month. Remember the hype about June and July sales decreasing? They have both decreased vs the previous month in 8 of the last 10 years. Doom and gloom, or a normal seasonal market? You decide.

*Average sales prices continue to grow at +5 to +6% above last year. Many neighborhoods (se below) are seeing wild swings in prices as the mix of homes shifts from month to month.

*Good quality, well prepared, properly priced and well marketed homes are selling quickly. As an example, I recently sold a home in one week for 17% more than my clients bought it for a year ago (they didn't do any major renovations). One of my colleagues sold her home and had 11 offers on it.

*The condo market is generally very strong. There are some exceptions where the market is mature and heavily built. Sales along the newer sections of the Sheppard subway are booming, as are most developments in the midtown core.

*We are starting to see more positive signs in the higher priced market, but that could be affected by any delay in the proposed repealing of the Toronto Land Transfer Tax.

*The affordability index is still very positive, showing that most people can afford to be in the market.

*Interest rates are continuing to drop, now as low as 3.39% for 5 year fixed, with some people predicting that they will go as low as 2.99% (don't hold your breath on that one).

Those are some of my thoughts on the current market and where things are headed. If you agree, or not, I'd like to hear you views. Email me at armand@armandgilks.com

In this issue of my newsletter we have a number of interesting articles in addition to the market stats.

To have a look at my current newsletter including detailed market stats click here.