GTA REALTORS® Report Mid-Month Resale Housing Market Figures

TORONTO, December 16, 2010 — Greater Toronto REALTORS® reported 2,509 sales through the Multiple Listing Service® (MLS®) during the first two weeks of December 2010.

This represented a 19 per cent decrease compared to the 3,079 sales recorded during the same period in December 2009.  Year-to-date sales amounted to 84,316 – down one per cent from the 2009 total of 84,888.

“While off the 2009 record, the level of December transactions remains strong from a historic perspective.  The number of transactions in 2010 will be the third highest on record,” said Toronto Real Estate Board President Bill Johnston.

The average price for December mid-month transactions was $435,225 – up three per cent compared to the average of $423,103 recorded during the first 14 days of December 2009.

“Market conditions remain tight enough to support moderate growth in the average selling price.  Expect the three per cent annual rate of growth reported for the first two weeks of December to be the norm in 2011,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.

Summary Of December Sales And Average Price
December
2010 2009
Sales Average Price Sales Average Price
City of Toronto (“416”) 1,083 $470,918 1,343 $460,828
Rest of GTA (“905”) 1,426 $408,118 1,736 $393,918
GTA 2,509 $435,225 3,079 $423,103
Source: Toronto Real Estate Board
Sales & Average Price  By Home Type
December-2010
Sales Average Price
416 905 Total 416 905 Total
Detached 348 776 1,124 678,587 495,555 552,426
Yr./Yr. % Change -24% -17% -19% 3% 3% 3%
Semi-Detached 95 161 256 495,815 339,641 397,596
Yr./Yr. % Change -35% -13% -23% 10% 2% 3%
Townhouse 125 253 378 404,086 309,135 340,534
Yr./Yr. % Change -10% -24% -20% 5% 4% 5%
Condo Apartment 502 202 704 344,733 248,391 317,089
Yr./Yr. % Change -15% -11% -14% 4% 2% 3%

Resale housing market on solid ground in November

OTTAWA, Dec. 15 /CNW/ – National resale housing activity continues its return to normal levels, having risen in November 2010 for the fourth consecutive month, according to statistics released today by The Canadian Real Estate Association (CREA).

Seasonally adjusted national home sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards climbed 4.8 per cent in November 2010. Although this is well short of record level activity for the month of November posted a year ago, seasonally adjusted sales now stand 19.5 per cent above levels recorded in July 2010, when it reached this year’s low point.

“Sales activity rose in many local markets but eased in others,” said Georges Pahud, CREA President. “Home buyers and sellers need to recognize that local and national market trends may differ, and for that reason, they would do well to consult their local REALTOR® in order to understand how the housing market is shaping up in their market.”

Seasonally adjusted activity was up from October levels in two-thirds of all local markets, including eight of Canada’s ten most active markets. Month-over-month increases were reported in Calgary (+2.6 per cent), Edmonton (+6.9 per cent), Fraser Valley (+10.5 per cent), London & St. Thomas (+6.5 per cent), Montreal (+8.2 per cent), Ottawa (+4.2 per cent), Toronto (+6.0 per cent), and Greater Vancouver (+11.3 per cent). These markets accounted for more than half of national activity in November.

Actual (not seasonally adjusted) national sales activity in November 2010 was 9.3 per below levels in November 2009.

The persistence of large year-over-year declines from last year’s record levels has been masking the steady improvement in national sales activity since July 2010.  A comparison of November sales activity to sales for the same month in previous years suggests that activity is currently running at more normal levels (Exhibit 1: http://www.crea.ca/public/news_stats/pdfs/2010_12_15_media_report_en.pdf).

The number of new residential listings on Canadian MLS® Systems edged down 0.7 per cent on a seasonally adjusted basis in November. New listings remain 14.6 per cent below the peak reached in April 2010.

The national housing market has been firming up since July 2010 due to improving sales activity and a muted rise in new listings, but overall remains balanced. About 60 per cent of local markets in Canada were in balanced market territory in November. Of the remaining 40 per cent, three-quarters of these markets have a sales to new listings ratio consistent with a being classified as a sellers’ market.

“An increase in new listings is likely to return many sellers markets to balanced territory over the coming months,” said Gregory Klump, CREA’s Chief Economist. “With sales activity having returned to better health and a firm floor under prices, sellers who previously shied away from putting their home on the market are expected to list their home in response to improved housing demand in recent months.”

The number of months of inventory represents the number of months it would take to sell current inventories at the current rate of sales activity, and is another measure of the balance between housing supply and demand. The seasonally adjusted number of months of inventory stood at 5.8 months at the end of November on a national basis. This is down from 6.1 months in October. The number of months of inventory now stands 1.4 months below the level reached in July 2010, when it stood at this year’s highest level.

The national average price for homes sold in November 2010 was $344,268, up two per cent from November 2009. Nearly two-thirds of local markets recorded a year-over-year increase in average price. In recent months, the national average price has been influenced by rising prices but fewer sales in some of Canada’s priciest markets compared to one year ago.

“Following the chilling lows at the onset of the recent recession and the dizzying heights during the subsequent recovery, the national housing market appears to be returning to some semblance of normalcy,” said Klump. “Changes to mortgage regulations earlier this year were prudent and sufficient, striking the right balance between preventing speculative housing market activity and keeping homeownership affordability within reach for creditworthy home buyers. That’s a good thing, since housing activity helped support Canadian economic growth this year. Rising interest rates and weaker expected job growth are likely to contribute to softer prospects for housing market activity and average price growth next year, reflecting weakening economic growth prospects.”

PLEASE NOTE: The information contained in this news release combines both major market and national MLS® sales information from the previous month.

CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighborhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types.

MLS® is a co-operative marketing system used only by Canada’s real estate Boards to ensure maximum exposure of properties listed for sale.

The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 100,000 REALTORS® working through more than 100 real estate Boards and Associations.

Further information can be found at http://www.crea.ca/public/news_stats/pdfs/2010_12_15_media_report_en.pdf and http://www.crea.ca/public/news_stats/media.htm

Real Estate or Renovate?

With the market lagging a little across the country people everywhere are considering whether they should stay in their own homes and renovate, or buy a new one.  This seems like a simple choice but in reality there are a lot of questions to consider. The fundamental question is why are you thinking of moving?

Is Your Home Still Practical for You?

If you just had another child you may need to build an extra bedroom in order to stay in your current house.  Perhaps your children are older and now as teenagers they need their own space meaning you have to consider a new home with a basement or develop your own.  In most cases when the home is no longer practical for your needs and requires wholesale renovations it is financially prudent to do some cost effective cosmetic renno’s and sell the house.  It’s almost always cheaper to buy a home that is configured for your needs already. That said, logic can often take a back seat to emotions when owners contemplate selling a home in which their family was born and raised.

Have You Simply Fallen Out of Love with Your Home?

In many cases the home still works functionally for the owners but they are considering moving anyway.  This makes for a tougher dilemma as the renovations required to fix up a home that is a little dated can be cheaper and less hassle than a move.  Factors such as market dynamics, the size of home you are likely to buy and the price you could expect to get for your own home all come into play.  This is often where you need to seek the advice of a professional.  There is no substitute for experience.

If you do decide to sell your current home, you normally cannot avoid all of the renovation costs. For example, if you have lived in a house 15 years and not painted the walls…you owe that house some money!  People buying a home of that age expect to see updated decor and will cut their offering price substantially if they are going to have to paint it upon possession. It’s almost always more cost effective to do the work yourself.  This investment will lead to a quicker sale and more money in your pocket.  However, do not make the mistake of thinking you can get extra money for these types of renovation. The essential work that I refer to as the money you “owe” the house will ensure you get fair market value…not more!  As the old wise guys say, “The market is what the market is.”  You must also be aware of over renovating for a sale.  Any elaborate renovations you do will at best only help the house sell faster, at worst they may not appeal to potential buyers.

If you do plan to stay and enjoy the “new look” home you can justify spending more than would be prudent than if you were preparing to sell.  Look upon the expense as a chance to spend money on something you can enjoy every day for years to come as opposed to an all-out investment.  Be mindful if you think you may sell within the next five years, you may again require some advice on the project from a real estate professional.

Your Real Estate Consultant Can Help

A good friend in the Real Estate business is not just there for you when you are buying or selling.  When you need advice for insurance, tax or any other purposes you can always call.  Never is this more true than if you are caught in the dilemma of “real estate or renovate.”  I personally have an interior design consultant on my team and she is available for any of my clients to give some ideas on fix ups for sale or a renovation with your own enjoyment in mind.  I also advise my clients on the pros and cons of all the possible scenarios. I won’t say I have seen everything.  However, I am sure there are lots that I’ve seen that you may not have contemplated.  So don’t be afraid to call your friend in the Real Estate business for advice.  That’s what we are there for.  In the final analysis, it is always exciting to get a new home regardless of whether it is at your same address, or a new one.  So if you are caught in the “renovate or real estate” dilemma, the good news is whatever you decide will be awesome as long as you get good advice and make prudent informed decisions.

Steven Bergg is with Assurance Realty Ltd. in Kelowna, BC

Size Does Matter

Choosing the right size of home demands some decision making on your part. Do you have a big family? Do you have a flair for entertaining? Are you an empty nester? How much stuff do you own? Do you work from a home office? All of these points will have a bearing on what size of home you purchase. To make the right decision, size up your current needs.

Family Size: The biggest factor in the square footage needs of your home is how many family members live there, and therefore how many bedrooms are needed. A four-bedroom home is a far cry from a one-bedroom home. According to a study done by the Canadian Council on Social Development, one in seven homes are unsuitable in size for the family that lives within them. Children require space, no matter what their age. Whether it be a playroom or a rec. room, children need their own space as much as adults do. With a big family, you will need more than a couple of bedrooms. If you are single or an empty nester, you may be considering a smaller home or downsizing to fewer rooms and less living space. If you’re not going to use a dining room beyond the holidays, consider integrating an expandable table within your kitchen instead.

Storage Needs: Do you have boxes upon boxes of Christmas decorations? Are you a frequent shopper? Do you have more tools than a hardware store? You will need to consider the amount of  storage space for your specific needs. This includes closet, basement, attic and garage storage. Your household will be far less congested and disorganized, creating a calming environment, with your extra stuff hidden away.

Room Use: Working from home or sustaining a hobby will require extra square footage. Depending on the nature of your work (whether you will be receiving clients or storing materials) and the needs of your hobby (an easel for painting, a quilting machine or a dark room for developing photos), you may require only a small room or a large wing off one end of the home to fully integrate your lifestyle into your house.

Visitors: If you love to entertain and relish having your guests stick around for a big breakfast in the morning, you will need to plan for  guest rooms, lots of living space and a big kitchen to accommodate the crew.

Often the size of the home and the price go hand-in-hand. Compile a list of your needs and wishes and start narrowing your search from there. You’ll know when you’ve found the one.

Paul Baron is with Leading Edge Realty Inc. in Scarborough, ON