The market slowed down in July. For the first month this year, sales were lower than the corresponding month in 2003. As reported by the Toronto Real Estate Board, all residential sales were down by 9%. For condo sales, the overall market declined by 6%. Downtown condos were also down by 6%, while Etobicoke Waterfront condo sales were up slightly. Is this the end of the current market run? Our feeling is that this is just a summer pause. All bull markets take a breather. Early indications suggest that August sales for 2004 will exceed those of last August. However there are plenty of signs to suggest that the Fall market while strong, will not be as frantic as this Spring. Inventory, active listings are running 11% higher than a year ago and our guess is that this will increase. If sales only match last year going forward, then the sale-to-listing ratio will fall. Multiple offer situations will decline dramatically and prices should come off from the Spring highs by some 2-3%. In the Downtown condo market, the sale-to-listing ratio has eased back to 31%, indicating a better balance. Looking longer term, we expect the market to continue its steady upward trend but at a much slower pace - both in terms of sales increase and price appreciation. The underlying fundamentals have not changed. Interest rates will increase, but more moderately than many expect. Prices, in terms of affordability, are still sustainable. <br><center><b>You read it here first, the real estate market for 2005 will be good!</b></center> Our attention this month looks at sale prices on the Etobicoke Waterfront, and in particular the Marina Del Rey development and the units at 2269 Lake Shore Blvd. We tracked the sale prices for a two bedroom plus den on a lower floor with parking. The same unit sold in 2000 for $259,000. It sold again in 2002 for $284,000. The identical unit, two floors higher sold in 2003 for $329,000. This is an increase of 27% over three years. While this unit has not sold in 2004, my guess is that it would sell for more again. Why? The unit is approximately 1450 sq.ft (a much in demand sized unit) at a price of $226 per sq.ft. The building is surrounded by spacious grounds and has reasonable condo fees, which includes all utilities. If the unit were Downtown it might sell for 50% more.

The rental market is very active as we approach the first of September. Rentals Downtown for both one bedroom and two bedroom units were up 15-20% over last month. Prime units achieved multiple offers! Inventory is now turning over in less than 30 days on average as opposed to 40 days earlier this year. Remember that the rental market slows by November. This market is also very price sensitive. Price it incorrectly and the unit will not lease, as renters are very particular. The hottest rentals are in the $1350 - $1400 range. Two bedrooms around $1600-1800 attract a lot of interest too.

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