What's the forecast?
A fresh start to the year may be just what the softening Toronto housing market needed.Mid-month figures for January put homes sales in Canada’s biggest city up 2.5% and prices up 4% compared with the same period in January 2012, the Toronto Real Estate Board said Wednesday.Those figures appear to buck the softening trend the Toronto housing market has seen over the past year. Just a day ago, Canadian Real Estate Association numbers showed sales in the city sank 21.8% in December from a year ago, while prices climbed 6.0%.While it may be too early to say if home sales in Toronto are poised to make a solid recovery, the figures are providing market watchers with a dose of cautious optimism.“It will be important to watch sales trends closely as we move through the first quarter to see if some of the households who moved to the sidelines as a result of stricter lending guidelines are starting to renew their decision to purchase a home,” said Ann Hannah, president of the Toronto Real Estate Board in a statement.Toronto’s housing market in the first half of January was buoyed by a strong performance in the semi-detached sector, where sales soared 12.2% and prices were up 11.5% compared with a year earlier. Meanwhile, condo sales continued to under perform, declining 4.4% in the first 14 days of the month, with prices down 3.3%. (David George-Cosh)
Ever since my first Stats class wayyyy back in University, it's been ingrained in me to look, question and consider all numbers and their source. Who paid for the study? What variables did they use to come up with these numbers? In this case, what constitutes a sale?
It certainly appears that the Toronto Housing market is not softening and that we'll be okay, based on this article, but looking closer, two things strike me. First, the figures are based on Semi Detached homes, semi detached homes generally indicate first time home Buyers. Okay. So those figures are strong, great. But what does that mean for the Detached Sellers? The article doesn't mention the fact that along with the new mortgage rules that came into effect in July 2012, the Banks and Mortgage companies had until December to fully comply thus, Buyers were still able to qualify and today, not so much. If you live in a detached, where's those buyers?
Second, what constitutes a sale? Sounds simple enough but really, what constitutes a sale? Are these offers being made and accepted in the beginning of January? Or, are these offers that were made and accepted in October and the properties are now closing in January, because really, who wants to move in December? So while sales soared, did they really?
Figures aside, the new reality is this. The GTA Real Estate Market is moving back to basics. Over used terms like 'bidding war' have had their run and the focus will now be on realistically pricing homes without that line up of Buyers who are willing to bid high on uninspected for homes worth far less than the final sold figures. Sounds like a sad day for Sellers doesn't it? Not so.
While yes it would be great to sell high, have a line up of Agents and Buyers willing to pay big big money for that tiny little house you call home but the reality is, you'd be buying high as well. Over pricing doesn't just trickle, it floods. Sell High, Buy High. If you are buying high, can you afford the new furnace or the cost of having to replace all the electrical when something goes awry after you've closed on a property you failed to inspect because the line up out the door to buy was long?
Let's face it, not many win in an over priced market and now, it's back to reality. Priced right a home will always sell. Today's market is no different. It means your Realtor will have to put in some work. Marketing, open houses, flyers, phone calls and develop a more solid relationship with you, their client. It also means that the people who come through the door to look at your home will be qualified and able to purchase.
It's a good day for real estate as far as I am concerned because let's face it, I too am a homeowner and what happens in the market not only affects my career, but my property as well.
If you have any questions, big or small, please don't hesitate to email me at any time. It's better to have an answer than to guess!
Take care,
Nicole Kreutzberg, Realtor. Email to nicole@gtalisted.com
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