January started off the year like most of us predicted - residential sales in total were down 2% from the record January of last year. At the same time, active listings were 11% lower than last year. What does that mean? It is still a Sellers' market and the New City Land Transfer Tax has had minimal impact. On the condo front, overall condo sales were up by 13%. Downtown, condo sales were running 14% ahead of last year for January. Sales-to-active-listings for the Downtown condo market were still at 50% versus 40% a year ago - and remember that a balanced market is when the ratio is in the 25-35% range. While the overall market may have leveled off, the condo market continues to grow - again affordability and lifestyle choices are driving this market.
If potential condo buyers are looking for a market pause to jump into the market, it won't happen in 2008. Market timing may work for the stock market; it's never a good strategy for a primary residence. If you continue to rent and prices keep going up - you lose. If you buy, and even if prices fall initially, then you can be sure that the property you want to buy next has also fallen in price. So you never lose but instead you insure your ability to make the next move.
This month we looked at prices in Downtown's hottest market - Yorkville, and the most affordable new building there - 18 Yorkville. While 18 Yorkville is not really in Yorkville, it is really closer to Yonge; the building name itself has probably added another $50,000 to sale prices. The building was registered in late 2005 and so we have just over two years of sales to examine. The first unit we looked at was 1200 sq.ft. - two-bedroom/2 bath with parking. It first sold in January of 2006 for $729,000. The very same unit sold again in November of '07 for $777,000. The increase was only 6.5% over 21 months. Remember my previous commentaries that condo prices only began to escalate in 2007. The second unit we tracked was 500 sq.ft. one- bedroom, without parking. It sold in early 2006 for $246,000, and an identical unit sold in 2007 for $262,000 (an increase of 6.5%). In 2008, another identical unit sold for $320,000! That's 22% in just the last year, but to be fair, this unit was on a higher floor. Both the one and two-bedroom units are now selling at $640-650 per sq.ft. You can find current buildings in Yorkville that sell for more and you can find other new buildings Downtown that sell for $450 per sq.ft.!
There were just over 100 one-bedroom units leased in January. Days-on-market to lease out increased from a summer time average of 15 to 25 days currently. However rental prices stayed firm - averaging $1550-1600 for those with parking, versus $1450 for one-bedrooms without parking. Furnished one-bedroom units averaged $1800. Two-bedroom units took about the same time to lease up. They averaged about $2200. A three-bedroom condo, if you can find one, will cost about $4000 as they tend to be over 2,000 sq.ft.