December 5, 2009: November real estate sales were very strong. The number of listings sold was more than double the November 2008 results, when the real estate market slowed down due to the economic downturn. But that number was also higher than November 2007 sales, when we had a swift market to beat the Toronto Land Transfer tax.

Average prices in November were 14% higher than at the same time last year. 105% more sales were recorded, while the same number of properties were listed for sale. Inventory was almost half of what was available in November last year, and properties take, on average, 37% shorter time to sell.

Existing home sales are in line with some of the best years on record, and strong sales are recorded throughout the various property classes, from those affordable for the first time buyers to luxury homes. The highest number of sales was recorded for properties between $300,000 and $400,000. One-third of these were condo apartments and condo townhouses.

With fewer listings coming up and strong sales it is difficult to find a suitable home. Central districts experienced serious shortages of listings. Looking forward to the coming year we hope for more inventory, as the home owners react to the price growth and strong sales.

Average sale to list ratio was above 100% for most of the central districts, and marginally below in the north, east and west districts. By the end of November the number of sold properties surpassed the total number recorded in 2008 by 9.5%.  

Most sales - 27.88% - were recorded in the price range between $300,000 and $400,000, and again, like in October, almost three-quarters of the sold listings fell into the $250,000 to $750,000 bracket. 

The following graphs illustrate the performance of Toronto real estate market since 2006.

Last year's worsening market conditions are reflected by the purple line gradually descending from a 35% mark into the buyers' market range of below 18%. November and December and January were the worst months, with only about 13% of available listings being sold. The rapid rise of this year's red line is in part caused by low inventories, but nevertheless indicates that the real estate in Toronto is in good shape. You may notice the trend stabilizing and the line falling a bit in August and remaining flat in September before rising again in October. This is a typical seasonal trend, and the unusually high numbers are partially due to the low inventories.

Looking at the graph illustrating the average monthly prices it is evident that this year's prices surpassed by now those recorded in 2008 and in the last quarter of 2007. In April and May the average prices surpassed the 2007 prices for the same months, and almost meet 2008 figures. In June the average price rose above those recorded in recent years for the same months, and was 2% higher that in June 2008 Although in July and August the average price dropped slightly, but that follows the regular yearly fluctuations, and by September increased to the level not seen in the last four years. By October the average price was close to $425,000, a 20% gain from the last year level, and in November it dropped slightly to $418,460 - a 14% more on a year-over-year basis.

While 2009 started with a much higher inventory than what we have seen at the beginning of each of the last years, by May the number of homes available for sale has dropped well below the values typical for that time of year. In July it was 36% lower, in August 37.5%, and in September 42% lower than a year earlier. In October we had just over a half of the inventory in comparison to the same period a year ago. Although the number of new listings remained steady in November, the inventory was still 49% lower than a year earlier.

All areas of Toronto experience shortage of listings. The situation is most difficult for buyers in central Toronto, where 69.8% of listings sold in October and 64.6% in November, putting a lot of pressure on prices. In east Toronto districts 62.7% of the listings inventory sold in October and 63.3% in November; in the west districts 61.5%  sold in October and 55.3% last month; in the north districts 50.5% sold in October and 45.2 last month. These values are well in the seller's market range.

If you have questions regarding current Toronto real estate market, my partner Ellen Hanbidge and I will be glad to help.  Please e-mail us at team@torontotransitions.com or call our office at 416-487-4311.