March continued the upward trend in sales, as 9200 units were sold on TREB. This number was 11% lower than March of 2010 which was a record. In April we are expecting about 9600 sales which will again be lower than last year’s record number. In spite of what the media reports, this market is very strong – what separates it from last year are really two factors: first the poor weather in comparison to last year’s spring; and secondly, a lack of listing inventory – new listings in March were 19% lower than in March a year ago. When the weather improves and listings increase, we expect to see 2011 sales on a monthly basis move ahead of 2010 perhaps by May or June at the latest. No one is forecasting that except us!
The downtown condo market presents a different market. Here condo sales in March were 6% higher than March of 2010. This trend will continue for the balance of the year. The reason of course is that so many new condo projects are being registered and are entering the resale market. The question being asked is can the market absorb this many new units? The answer is yes!! The sale-to-listing ratio downtown for condos was 48% this March versus 55% last March – not much of a difference when you factor in all the new condos entering the resale market.
This month, we tracked sales at a newly registered condo – the Vibe at 100 Western Battery in Liberty Village. It was built by Monarch and was just registered at the end of 2010. The first unit we tracked was a two-bedroom/2 bath unit with parking sold by the Developer in 2009 for $390,000. The identical unit, at 838 sf, sold in January and February of this year for $424,000 and $425,000. By March the unit sold for $433,000 or $515 per sf. A smaller unit at 611 sf – a one-bedroom with parking sold at the end of 2010 for $305,000 (probably as an assignment). Two identical units sold in February this year for $322,000 and $324,000 or $530 per sf. The point to be made for buyers is that assignments are cheaper and once the building is registered prices usually go up by $20,000.
As predicted, rental rates are moving up and there is a significant shortage of available units, even with record rental volumes. There were 22 studios, 383 one-bedroom units and 223 two-bedroom units leased in March. The number of rentals is an indication that the majority of investors in the pre-construction market have decided to rent rather than sell their units at registration! Studios leased at an average rate of $1325. One-bedroom units without parking averaged $1550. Add a den plus parking and you can pay $1725! Renters are now looking to convert a den into a second bedroom. The market for two-bedroom units is also in high demand and units start at $1950 and go to $2400 for a den and parking. There are no three bedroom units in the market place – developers don’t build them! Only five units were leased last month at an average price of $3500. How tight is this market? The average one bedroom stays on the market 6-10 days and many attract multiple offers.