December 2008

Toronto’s Shifting Real Estate Market

The Roll Price Plays in Selling Your Home

Currently our market has radically shifted. Gone are the days where you listed your home at what you thought was market value and received 4 or even 8 offers way over market value.

Now we are chasing the market down.

So ideally you should sit out selling in the current marketplace.

Reality is that some folks need to move anyway. Also frankly it is a great time to buy as you can pick up a home over the next couple of years for maybe 20% less than you would have previously paid.

Also if your goal is to move up to a bigger, better home or maybe just a better location you will sell for less but you will buy your new home for substantially less.

This will give you a smaller mortgage payment and when the market swings up again you will pick up much more equity on the higher priced home than you would have on the lower priced home. Twenty percent on an $800,000 home is much more than 20% increase on a $400,000. home.

Many sellers are currently putting there homes on the market at the old pricing where they then sit on the market for 2-3 months making the property look stale.

Also this will not generate a large volume of showings. Wrong strategy.

The trick to selling in this market is determining what the new price should be… yes that’s right… figuring out what it is moving to, the market price is dropping and will continue to drop for sometime now. There is no history anymore on what the prices are so no way to look backwards and say these are the last 4 sales in your area and so this is where we should list the home. That history will emerge in the next couple of years. But for now we are using an educated guess.

At the moment the national figures are telling us that the prices have dropped 11% between May and Nov. 2008.

On a market trending down you want to get ahead of the market not behind it chasing it down. The key is to still sell in a reasonable amount of time. Currently well priced homes in Toronto are selling in 39 days or less on average.

So how do you know if you have priced it right. Realtors have some rules of thumb they go by. These have been developed from years of tracking sales and statistics.

One of these is that in a normal market we tend to see some sort of action on a property for every 14,15 viewings that take place. This # could extend a bit out to 20 days in an incredibly soft market and of course would be longer in a total depression.

That action could just be a phone call from a buyer rep saying their client is very interested and asking for more info. Quite often it is an offer.

In a hot market a seller often gets all those viewings within the 1st 2 days. In a soft market it can take 2-3 months to get the same # of viewings if the price is a bit high for the market.

Statistically we know that homes that sell in the first 2 weeks they are on the market always get the highest price. After 2 weeks the price begins to drop.

So what this means is that you want to list your home at a price that will generate a great number of showings in the first 2 weeks with a view to being sold in that first 2 weeks. After the first 2 weeks the showing volume tends to drop off.

Is it possible to sell in 2 weeks at the bottom of a market and still get a fair price?

Yes, I did this for sellers a number of times in the last really bad recessionary market in 1990. In fact in some cases generated multiple offers over asking price.

The price would end up being more than some higher priced homes ultimately received after being on the market 3-4 months. In one case I generated 4 offers in 5 days with an over asking sale price.

So before you list have a serious talk with your realtor about price strategy. If your are not committed to a sale don’t go on the market at this time. You will simply be ignored if you don’t price aggressively. If your realtor doesn’t have the stats and info you need plus a great strategy for selling your home in any market then give our team a call. We will consult with you and see if we can realistically work together to achieve your outcome.

Get Up To Date Listings For The GTA

Planning to Purchase in the Next 6 Months? Would it help to start learning about house, loft and condo prices right now? Before taking that all crucial step of viewing homes it may be important to gather as much information as possible to familiarize yourself with costs of making a purchase. Plus you will want to know what your money will buy you in the current busy Toronto marketplace.

How about opening your e-mail inbox each morning and finding a great selection of homes or condos in the areas your are thinking about purchasing in. Read more

Toronto Real Estate Market Update

Toronto, December 4, 2008:

Greater Toronto REALTORS® recorded 3,640 transactions last month, from 7,313sales in November 2007, Toronto Real Estate Board President Maureen O’Neill announced today. Year-to-date sales figures for the Greater Toronto Area show 72,086 transactions in 2008, from 88,695 sales recorded in the same January to November period a year ago. By contrast, the 2008 year-to-date average price in the GTA is $379,489, from $375,445 in 2007.

“Its important for the public to understand that while sales activity has moderated in 2008, due to current economic conditions, the average price of homes has increased from 2006 still making real estate a solid long term investment,” said O’Neill.

In the 416 area, 1,523 transactions took place last month, from 3,426 sales recorded in November 2007. From a year-todate perspective, there have been 28,806 sales in the 416 area this year, from 36,804 transactions a year ago.

In the 905 Region 2,117 homes changed hands last month, from November 2007’s 3,887 sales. The 905 Region’s yearto-date figures show 43,280 transactions this year, from 51,891 sales recorded during the same period in 2007.

“Homeownership in the Greater Toronto Area continues to be an affordable, stable and secure investment,” said Ms. O’Neill. “Home buyers and sellers should be confident about their bricks and mortar investment which provides shelter and a place to raise a family.”

“Home prices are affordable, interest rates are at historical low levels and the supply of homes for sale is good providing additional reasons for buyers thinking of entering the market,” added O’Neill.

The average price of a home in the GTA last month was $368,582, from $393,747 noted in November 2007. In November 2006 the average price was recorded at $355,727. In the 416 area, last month’s average price was $390,225, from $433,859 noted in November 2007. The average price recorded in November 2006 was $381,188. From a year-to-date perspective the 2008 average price in the 416 area is $411,155, from last year’s $411,640.

In the 905 Region, the average price recorded last month was $353,012, from $358,391 recorded in November of 2007. In November 2006 the average price was $335,522. The year-to-date average price in the 905 Region this year is $359,245, from $349,774 in 2007.

The average number of days a home currently remains on the market in the GTA is 41, from an average of 32 days last November. There are currently 27,037 homes listed on the TorontoMLS system compared to 18,309 available properties in November 2007.

“While homeownership offers immediate benefits and long term value by way of equity, it also provides tax benefits over time,” said Ms. O’Neill. “If you bought a house five years ago, it would be worth more than 20 per cent more today.”

“As REALTORS®, we help build communities and will continue to do so even during challenging economic times,” added Ms. O’Neill. “It’s important to consult with a REALTOR® to get accurate local market information.”

For a complete copy of November’s Market Watch Report visit www.TorontoRealEstateBoard.com

For the Full Story, Visit my Blog at www.realestatetorontoblog.com