Toronto Real Estate Sales Prices Flat in September

John Pasalis in Toronto Real Estate News

Real estate sales in the Greater Toronto Area for the first half of September declined to 2,726 a 16% drop over the record set during the same period in 2007.  It's interesting to note that sales in the city of Toronto are down 23% compared to an 11% decline in the 905 region.

Average prices are flat for the GTA rising by just $1,794 to $366,158. 

The number of listings are up 26% over last year and the days on market are up to 37 from 31.

Here's the full press release from the Toronto Real Estate Board:

The Greater Toronto Area’s autumn resale housing market began with moderate activity, Toronto Real Estate Board President Maureen O’Neill announced today.

With 2,726 sales during the first half of this month, activity has declined 16 per cent from the 3,236 recorded during same time period a year ago. Compared to the 2,913 transactions recorded during the first half of September 2006, activity has declined six per cent.

In the City of Toronto, 998 sales were recorded, which represents a 23 per cent decline from the 1,297 transactions recorded in the first half of September 2007 and an 11 per cent decline from the 1,118 homes that changed hands in 2006. However, activity increased 16 per cent in the first half of September 2007 from the same period in 2006.

In the 905 Region, there were 1,728 sales, down 11 per cent from the first half of September 2007, when 1,939 transactions were recorded and within four per cent of the 1,795 sales recorded during the same timeframe in 2006. However, activity increased eight per cent during the first two weeks of September 2007 as compared to 2006.

“Although housing activity in the GTA remains moderate, we’re continuing to see a consistent pattern, and this stability is certainly positive news compared to markets in other sectors and in other world cities,” said Ms. O’Neill.

At $366,158 the average price of housing in the GTA has increased marginally from the $364,364 recorded a year ago and is up nine per cent from $335,208 recorded in September 2006.

In the City of Toronto, the average price is $386,524 up marginally from the $384,796 recorded in the first half of September 2007 and up 12 per cent from the $343,561 average from the same period in 2006.

In the 905 Region, the average price is $354,395; an increase of one per cent from $350,698 recorded a year ago and up seven per cent from $330,005 recorded in the first half of September 2006.

“The fact that prices have held firm despite moderate activity shows that consumers regard real estate as a sound investment,” said Ms. O’Neill.

The percentage of asking price that Sellers receive for their homes has also remained consistent. The list to sale price ratio is 98 per cent, as it was a year ago.

The 26,299 properties listed for sale on the TorontoMLS system have increased 26 per cent from a year ago when 20,841 homes were available. The time that homes remain on the market has increased as well, to an average of 37 days compared to 31 days a year ago.

In a few areas though, activity heated up during the first two weeks of the month.

Transactions in Bowmanville (E17) increased 66 per cent from a year ago, as a result of strong detached home sales.

In Streetsville (W20) activity increased seven per cent compared to mid-September 2007 due mainly to semi-detached sales.

Vaughan (N02) saw a 20 per cent increased in transactions from a year ago due to strong sales of all housing types.

John Pasalis is a sales associate at Prudential Properties Plus in Toronto and a founder of Realosophy. Email John

Subscribe to the Move Smartly blog by email

Comments

[Dont Buy It]

Hi John, I wanted your opinion on the fact that the average price of home in Canada has declined for 3 straight months over last year. In August the average price of a house declined 5% over last years price. I remember reading in a previous post from you that the US's prices have also dropped 5% year/year. Isnt troubling that the US and Canadas average prices have declined by the same amount?

[Don't Buy it]

Sorry forgot to post a link to the above.

Home prices take a hit

http://www.theglobeandmail.com/servlet/story/LAC.20080916.RHOUSING16/TPStory/Business

[John Pasalis]

Don't Buy It, you ask a very good question. It is definitely troubling to read that real estate prices are dropping in both countries, but it's important to note that the cause for the declines in both countries are very different.

When looking at the decline in Canada, we see that it is largely driven by declines in several west coast cities that were overvalued. If there is a housing bubble in Canada, it's in those cities. There is no national housing bubble.

We need to be cautious when looking at national statistics because what's going on in Western Canada is probably not very relevant in Toronto. The biggest threat to real estate markets in those cities may be the collapse of their real estate bubbles. A real estate bubble bursting isn't an issue in Toronto because we're not in a bubble. But unlike Western Canada, we have reason to be more concerned about our economy than they do. How is the slowdown in Ontario's economy going to impact Toronto's real estate market? That's the important question we should be thinking about.

[CinToronto]

Hello all: It doesn't make sense to talk about real estate without discussing what is going on in the financial markets. I find it hard to believe that the turmoil won't affect virtually everything for the next while. My grandmother knows what's going on. Never mind Friday's recovery, Canadians will notice that their investments haven't made any money in the last few years. This is no longer just an Ontario issue.

[Dont Buy It]

Hi John,

I disagree with you that there is no bubble in Toronto. Prices have be increasing in Toronto much faster than wages in the last 10 years, and its simply not affordable.

I agree we must look at the Ontario economy. If 1991 was any indication, a recession in Ontario is usually followed by a big decline in Real Estate prices.

Consumer confidence plays a big role in the Real Estate market, and it is hurting right now. Talks of Global Recessions/Depressions and investment banks bankrupting, stock markets plunging, talks of falling housing prices in Canada, thousands losing their jobs in Ontario, all make consumers think Real Estate is in for a big correction. Look at the poll you had on your site and you will see that most people believe that Real Estate is not a good investment right now in Toronto. With all the doom and gloom in the media, most people I talk to think the same.

[Patrice]

Hello "Don't buy it"

So if most people believe certain things to be true, Jon should change his mind?

No matter the subject, never forget that most people thought the earth was flat at a certain point. The fact that many people think a certain way doesn't make it anymore true.

I also think that the market might suffer a big correction; but i respect Jon opinion.

[Dont Buy It,]

Hi Patrice,

You should learn how to read. I didn't mean I don't respect Johns opinion. I meant to underline the importance of "Consumer Confidence" in Toronto Real Estate. There is alot of uncertainty of what will happen to the economy in the next 12 months. If most people are not confident becuase of the Recession we are in and believe that a price correction is coming then they will be less willing to pay top dollar for a house, thus adding a downward pressure on prices.

Don't underestimate the "herd mentality" aspect to Real Estate in both a "boom" and "bust" market. Things can go from "hot" to cold" very quickly as we have seen based on low consumer confidence.

[Dont Buy It]

John,

This is what I mean. Stories like this in Todays Globe and Mail will only make people panic.

Canada could be headed for a housing and mortgage meltdown similar to the one that has devasted the U.S. economy, Merrill Lynch warned Wednesday

http://www.reportonbusiness.com/servlet/story/RTGAM.20080924.wmortgage0924/BNStory/Business/home

Torontos market is in the classic start of a correction. Growth of 10-15% in prices over a sustained period (2004-2007). Then falling sales(March 08) dramatic increase in listings (April - Sept 08) slowing prices (April - July) and then price decreases in the city of Toronto (Aug 08). Combine this with the crazy amount of new condos on the market - of which more than half are owned by investors, combined with the loss of hundreds of very high paying jobs on Bay Street - combined with the loss of billions of dollars in Blue Toronto's stock portfolio's.

And we have a perfect storm. This pig is going down. Good luck