Mar
GTA February Market Up 5.14 %
By Brian Madigan LL.B.
With all the bad news in the media these days, I thought that I should say something positive. The average price of resale single family homes rose 5.14% in the last month.
Now, if I were promoting stocks, I would also say that represents an annualized rate of return of 61.17%. But, that would be rather silly. That would suppose that the same monthly rate of return would continue uninterrupted for a period of 12 months. That is not going to happen in the real estate market, and do you know something? It’s not going to happen in the stock market either!
So, letâ€s get back to reality and the Toronto and GTA real estate market.
GTA Resale Prices
$ 343.632.00…….January 2009
$ 361,305.00…….February 2009
You should also appreciate that the average price was $ 361,4ǯ.00 in December 2008, so the January decline was quite significant. Really, this simply means that the average price has returned to its 2008 year end level.
GTA Resale Volumes
4,120………..February, 2009
6,ዏ……….. 2008
6,772……….. 2007
6,756……….. 2006
6,171……… 2005
6,060……….. 2004
The number of sales was very low in the month of February. Compared to 20Ǩ, there was a 31.5% decline in sales, and compared to the month of February in the previous 5 year period, there was a 35.16% decline in the number of sales.
So, what does this mean? It certainly means that prices are holding their own despite lowered volumes. In fact, with a decline of about one third in volume, you would expect to see a major loss in values, but, that hasn’t happened. If you were to analyze the data further, it would show upward pressure on the level of prices.
During the month of February, only a limited number of better houses were on the market. The same was true in January. If everyone expects a bad market, why would anyone who had a good house and had a choice, select January or February to sell?
The result at the moment would seem to suggest that there are some good bargains out there. Also, there is upward pressure on the prices. Those two forces, namely, an increased demand and rising prices should encourage many prospective buyers to return to the marketplace.
Besides, the mortgage rates are now the lowest they have been in a half century.
Brian Madigan LL.B., Realtor is an author and commentator on real estate matters, Coldwell Banker Innovators Realty
905-796-8888
www.OntarioRealEstateSource.com
