Toronto Market in Decline in November 2014 (as predicted)
You might be interested in the most recent report from the Toronto Real Estate Board:
“Sales & Price Growth Continue in November
TORONTO, December 4, 2014 – Toronto Real Estate Board President Paul Etherington
announced that Greater Toronto REALTORS® reported 6,519 residential transactions
through the TorontoMLS system in November 2014. This result was up by 2.6 per cent
compared to 6,354 sales reported in November 2013. Through the first 11 months of 2014,
total sales amounted to 88,462 - up 6.6 per cent compared to the same period in 2013.
While the trend of year-over-year sales growth continued, the supply of listings remained
constrained, with active listings at the end of November down in comparison to last year.
"Even with a constrained supply of homes for sale in many parts of the Greater Toronto
Area, buyers continued to get deals done last month. Households remain upbeat about
home ownership because monthly mortgage payments remain affordable relative to
accepted lending standards. This is coupled with the fact that housing has proven to be a
quality long-term investment," stated Mr. Etherington.
The average selling price for November transactions was up by 7.4 per cent year-over-year
to $577,936. The year-to-date average price was up by 8.4 per cent to $567,198. The
MLS(R) Home Price Index Composite Benchmark price for November was up by 7.7 per cent
compared to a year earlier.
"The robust average price growth experienced throughout 2014 has been fundamentally
sound, with demand high relative to supply. Strong competition between buyers has
exerted upward pressure on selling prices. Barring a substantial shift in the relationship
between sales and listings in the GTA, price growth is expected to continue through 2015,"
said Jason Mercer, TREB's Director of Market Analysis.’
So, what do you think of that? Rising prices, short supply, numbers of sales up! Obviously, that should mean upward pressure on the price….right?
Well, no, look closely, nothing was actually said about the monthly numbers.
Let’s have a closer look ourselves:
The high water mark this year was October. That was different and unpredictable. That deviated from the norm. We would have expected the height of the market to have been in May. Now, we are off about $10,000from October. That seems normal.
Let’s have a closer look. What happened last year?
Last year, the height of the market was in May. The average sale price was $540,581. In November, the price dropped to $538,189, that’s $2,392 or 0.04% (less than one half of one percent).
This year, the average sale price in May was $584,902 and in November, the price dropped to $577,936, that’s $6,966 or 0.01 % (one percent). The decrease off the peak of the Spring market is 2 and one half times the amount that it was last year.
Is this information meaningful or not? Maybe! We’ll have to watch to see what happens. It just looks like October 2014 was a little too high.
What’s in store as we go forward:
- lower prices in December, and then
- a resumption of increased prices in January.
Brian Madigan LL.B., Broker