Brian Madigan LL.B., Broker
BRMadigan@iSourceRealEstate.com

RE/MAX West Realty Inc.,
Brokerage
Independently owned and operated

96 Rexdale Blvd. 
Toronto, Ontario 


Phone: 416-745-2300
Toll Free: 1-888-507-0817

 

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What’s Happening in the Toronto Real Estate Market? (August 2013)

September 6, 2013 - Updated: September 6, 2013

 

Toronto Real Estate Market -August 2013 Statistics

 

In order for us to assess what is happening, let’s have a look at the public announcement (and commentary) by the Toronto Real Estate Board. After all, they are the ones who maintain the statistics.

 

Here’s a copy of the news release:

 

August 2013 Sales and Average Price Up Over 2012

 

TORONTO, September 5, 2013Greater Toronto Area REALTORS® reported 7,569 residential transactions through the Toronto MLS system in August 2013. This represented a 21 per cent increase compared to 6,249 sales in August 2012.

 

“Sales were up strongly this past August for all major home types compared to last year. Many households have accounted for the added costs brought on by stricter mortgage lending guidelines and have reactivated their search for a home. These households have found that a diversity of affordable ownership options exist throughout the GTA,” said Toronto Real Estate Board President Dianne Usher.

 

The average selling price for August 2013 was $503,094 –up by almost 5.5 per cent compared to the average of $477,170 in August 2012. The MLS® Home Price Index (HPI) composite benchmark was up by 3.7 per cent over the same period.

 

“Despite an increase in borrowing costs during the spring and summer, an average priced home in the GTA has remained affordable for a household earning an average income. With this in mind, tight market conditions are expected to promote continued price growth through the remainder of 2013,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.

 

 

All in all, that sounds pretty good, sales are up 21% and prices are up 5.5 %. So, what could be better than that?

 

Let’s have a closer look at the numbers.

 

 

Sales                         (broken down monthy)

 

2012

 

January                                     4,431

 

February                                  6,809

 

March                                      9,383

 

April                                        10,021

 

May                                         10,544

 

June                                         9,129

 

July                                          7,338

 

August                                     6,249

 

September                                5,687

 

October                                    6,713

 

November                                5,615

 

December                                 3,582

 

 

2013

 

January                                     4,229

 

February                                   5,613

 

March                                      7,540

 

April                                        9,541

 

May                                         9,952

 

June                                         8,840

 

July                                          8,420

 

August                                     7,569

 

 

Average Prices                 (broken down monthly)

 

2012

 

                       

January        $462,701

 

February      $500,249

 

March          $500,892

 

April            $515,888

 

May             $514,567

 

June             $507,342

 

July             $475,523

 

August         $477,170

 

September   $501,326

 

October       $502,127

 

November    $484,186

 

December    $477,756

 

 

2013

 

 

January        $482,080

 

February      $509,396

 

March          $517,207

 

April            $525,402

 

May             $540,756

 

June             $530,342

 

July             $513,043

 

August         $503,094

 

 

 

When we look at the average prices what do you see? At $503,094 we are only marginally better than several other months since 2012. In February of 2012 we were already at $500,249. That would be a 0.01% (1/10 of 1%) increase over 18 months, which works out to an annual 0.04 %. That’s not good. That’s a gain of less than one half of one per cent per year.

 

And, if we look at the month of May this year, we were at $540,756, so we have lost $37,662 since then, which works out to 7% drop since that time.

 

It’s fun to work with numbers. Sometimes they say what you want them to say and sometimes they don’t. Naturally, it’s important to be consistent and there are likely to be differences when comparing.

 

The Toronto Real Estate Board (TREB) constantly uses the year over year comparison. At least, they are consistent in their presentation. So, they compare August of this year to August of last year and go with the result, up or down.

 

This is a good comparison model when we are talking about sales. August traditionally is not a particularly strong month, so it’s better to compare it, to the month of August in previous years. This year, sales were up by 21%. But, you really can’t understand whether that’s positive or negative, until you know something about the August sales in previous years. Maybe August 2012 was just a bad year?

 

So, just for the fun of it, why don’t we look at the last 10 years. All these numbers are drawn from TREB’s published statistics:

 

2013                                                     7,569

 

2012                                                     6,249

 

2011                                                     7,542        

 

2010                                                     6,232        

 

2009                                                     8,035

 

2008                                                     6,318

 

2007                                                     8,059

 

2006                                                     6,976

 

2005                                                     7,326

 

2004                                                     6,743

 

The average number of real estate transactions which took place during the month of August was 7,105. This year, there were 464 more deals, which is a 7% increase over the 10 year average.

 

You might also wonder how the year is going, even if you reduce that 21% increase down to 7%?

 

Well, not quite so good!

 

Last year, the total sales to the end of August was 63,904 and this year that same number is 61,704, or 2,200 fewer sales. That would be a 3% decrease in sales this year. So, do you really care about the sales in August this year? And, why compare it to August 2012, which was the second worst August in a decade?

 

 

And what about that $503,094, how does that compare to the past? 

 

Here are some of the recent newspaper headlines, published about the TREB results:

 

“Toronto Real Estate Prices Jump with Condos helping increase in sales”

 

“Toronto Homes Sales up 21% in August, realtors say”

 

“Canada’s Two largest real estate markets are surging”

 

 

However, what if we were to come up with our own headlines:

 

  • Toronto Prices Drop 7% since May

 

  • Toronto Market Stagnates with 18 Months of No Growth

 

  • Sales in Toronto Are Down 3% this year     

 

Our own headlines are all actually true. They are biased, in part, because we wanted to choose a negative spin. But, just how valuable is the positive spin, particularly when those choosing the headlines, are not disclosing any bias, just providing you with the facts, or at least some of them.

 

If you would like to discuss the market, please give me a call.

 

Brian Madigan LL.B., Broker

www.iSourceRealEstate.com

 


Tagged with: toronto gta market august 2013
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Brian Madigan LL.B. Broker

RE/MAX West Realty Inc. Brokerage

Independently owned and operated

96 Rexdale Blvd. , Toronto Ontario,

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