John Pasalis in Toronto Real Estate News
The Toronto Real Estate Board released their monthly Market Watch report yesterday and the numbers aren't very encouraging. We are continuing to see a significant imbalance between the supply and demand for homes in Toronto.
The inventory of homes available for sale in September dropped 42% over the same month in the previous year.
Resale home sales increased by 28% over last year breaking a sales record for the month of September.
The sales-to-inventory ratio for Toronto's market continues to show a strong imbalance between supply and demand. There are far too many buyers competing for too few houses.
In a balanced market we would expect to see 2 homes sell for every ten that are available for sale(a sales-to-inventory ratio of 20%). Fifty percent of all homes available for sale sold in September.
John Pasalis is the Broker owner of Realosophy Realty Inc in Toronto. Email John
John, given all of this, why do we still hear "experts" say that "affordability is high" and that it's a great time to buy a house?
And are there any actual indicators to help explain the record-low inventory?
Posted by: Jordan | October 07, 2009 at 11:47 AM
I'm curious as to what the Sales-to-Inventory ratio graph looked like historically over the past 50 or so years.
Posted by: skube | October 07, 2009 at 02:50 PM
Jordan, when you hear news reports about "affordability" they are talking about mortgage payments, not prices. House prices are at or near record highs due to the high sales to inventory ratio, but (unsustainable) low rates and 35 year amortizations are keeping monthly payments relatively "affordable". The question is what will happen when rates inevitably go up - many predict demand to fall on the supply/demand equation, but what will happen to supply... will people be afraid to sell or will they be forced to sell due to economic conditions? If you don't already read Garth Turner's Blog www.greaterfool.ca you should get caught up, although it's definitely biased towards the bearish viewpoint there are a range of opinions that will get you up to speed on the real estate market.
Posted by: Mike | October 07, 2009 at 11:16 PM
Good post about Toronto real estate inventory . I did come across a blog WGCommunities.com. It has wonderful information on community building and investing in real estate. Hope it will be helpful for you guys too.
Thanks,
Roy Peter - Real estate marketing
Posted by: Roy Peter | October 14, 2009 at 12:52 AM