Everyone wants to know when is the peak or the bottom of a market. That's when you sell or buy and supposedly make the most money. For years, investment companies have been touting how they can pick the top and bottom of the stock market, and no one has succeeded. This has not stopped people who think they can predict the top and the bottom of the real estate market. Twitter is full of these self-appointed experts. Here's what I do know.
September sale results on the Toronto Real Estate Board produced mixed results. For the ‘bears’, their focus was on the decline in sales from September a year ago – down 35% to 6379 units. A normal September should have produced sales in the 8,000 range. While ‘new’ listings for the month were up by 9%, ‘active’ listings were at 19,000 units at month end which represents about a 2.5 month’s supply on an annual basis. That is certainly higher than the last year but is well within a balanced market.
One of the worst statistics in Real is average prices. First, there is no such thing as an average house or property. Secondly, there is no such thing as an average location. Average prices also have another major problem. It assumes that the mix of sales is the same over time, and that never happens.
Since April, the hottest real estate market in Toronto has been luxury condo sales. In 2016, the highest price for a condo was 6.5 million. This year, the highest priced condo was 11 million. Did you know, sales over 1 million dollars for condos are 86% higher in 2017 than for the same period last year. In contrast, the overall market is down by 16%. So why the sudden interest?
A lot of people seem concerned about our real estate market – especially my agents! Yes, the market has been slow since April, and yes prices have backed off in the house but not the condo market. That’s because house prices had an unsustainable run up – not just this spring but over the last three years where we had double digit price increases.
It's the first week of September which means it's a busy time for renting. Unlike past years, we now have rent controls. So how will this impact Toronto renters? This is not a panacea for Tenants, in fact, rent controls can cause a big problem for Tenants, for the short, and long term.