Here we go again explaining why sales are down. Yet the market is not correcting, as many newspaper experts want you to believe. Remember last month's Report when we told you that bad weather can impact a market, and that we also expected March sales would be lower too! Well they were! Residential sales for the month were off by 22% from March of '07. Overall condo sales were also lower by 10%, and the Downtown and Etobicoke markets were off by 18% and 14%. So condo sale numbers do lie!! What is more important is that the average 'days on market' is only 24. In the U.S. it is measured in months - try 8 to 10. The average 'sale to list price' is 101% - and multiple offers are very common on good properties. Finally the number of active condo listings Downtown in March of '08 was 92 units lower than in March of '07! Preliminary numbers for April suggest that this month's sales will be 3-5% lower than last year. If you just track the sales numbers, we are simply lagging last year by about 30 days.
The only problem with this market is that Buyers and Sellers can't get on the same page! Buyers read the papers and think they can kick the tires, because properties sales are down; and Sellers think they can list at any price and that multiple offers will be forthcoming. What they need to do is to get the real facts about this market and their property. This can only be done by someone who has access to all the market data - read a real estate agent and not a newspaper reporter.
This month we looked at sales at 65 Harbour Square, an older but well maintained condo on the waterfront. Besides excellent amenities, the units tend to be larger than in most buildings. The first unit we looked at was a two bedroom, two bath unit with parking with the best water view in the building. It sold this year for $839,000. The same unit sold two years ago for $730,000 or an increase of 15%. The price per sq.ft. was only $550. Many new developments are asking the same price without the parking and without a premium view! And only a couple of years ago these units could be purchased for less than $500 per sq.ft. The second unit we tracked was a small one bedroom unit with parking at 640 sq.ft. The most recent sale in 2008 was $256,000. In 2007, these units were selling for $240,000 and in 2006 they were averaging $230,000. Where can you get value like this at $400 per sq.ft.
The rental market is beginning to heat up as 154 one bedroom units were leased in March. To help tenants and owners, we decided to break down the one bedroom market. One bedroom units without parking averaged $1300. Add a parking spot and now you are at $1500. Suppose you want a den - that's another $50 a month. And if you get that second bath or powder room $40 more will cover that. So the one bedroom range is $1300 to $1590! Two bedroom units run from $1900 without parking to $2250 with parking and den. And of course furnished units will cost another $300+ per month.