The July numbers are out from the Toronto Real Estate Board. This is a guest post by Andrew la Fleur.
We Are Still In a Buyer’s Market
The sales to listing ratio to me is the most important statistic for the downtown condo market. In one single stat, you get a snapshot of how the entire market is doing. For July that number is at 23% (the blue line at the bottom of the chart above), down from 26% in June the month before and way down from the average number for July 2004-2012 of 47%. We are definitely in buyer’s market territory.
The Sky Has Not Fallen
Many were expecting the sales:listing ratio to actually be much lower than it was for July. I thought there was a good chance it would drop into the teens, a number we have not seen since the recession of 2008-2009. In Vancouver the condo market for July showed a 12% sales:listing ratio. So at 23%, only a 3% dip from June, the market is still holding up relatively well. Prices are flat but still holding up compared to this time last year.
Don’t Expect Any Fire Sales
As I said in my market update last month, the variable to watch closely is the supply of condos available for sale (active listings). What we are seeing in the July stats is that amount of new listings hitting market has started to taper off already. The word is out. The market is slowing and in typical Toronto fashion, sellers are holding off listing rather than selling for less than peak values. Don’t expect any fire sales in Toronto anytime soon.
Supply Is Still At An All Time High
That said, active listings tend to go DOWN from June to July, however, they are still trending UP (1727 listings in June to 1745 in July)- this abnormality supports the idea that we are definitely in a buyer’s market right now and will be for the near future.
Prices Facing Downward Pressure
The supply situation combined with lackluster sales numbers is putting downward pressure on prices right now (you can see in the chart above that prices are flattening out). We are already starting to see pockets of the downtown where prices seem to be coming down slightly. Expect this situation to continue through the fall market and into the winter.
The Next 6 Months Will Be Great For Buyers
The next 6 months will be a great time to be a buyer in Toronto. When putting in an offer on a property that has been on the market for more than a few weeks, don’t be shy – come in low and negotiate hard. If you are planning on listing your condo for sale in 2012, take a good hard look at the most recent sales activity in your building and surrounding buildings before you decide on a list price. If we do not see a huge upsurge in listings in the next few months, and interest rates remain low, then chances are the market will pick up again in the spring of 2013. The window of opportunity is now for buyers.