MARCH / APRIL 2008
February was the first month where sales were actually lower than the same month last year in the past twelve months. The Toronto Real Estate Board reported that residential sales were down by 11%. For condos, sales were off by only 3% but Downtown condo sales were lower by 15%! Already the so-called experts are saying the market has turned. The only problem is that they don't have all the facts! Believe it or not weather and snow had a big impact. Real estate sales are not 'date sensitive'. People don't have to buy on a particular date. If the weather is bad, they just stay home. And the snow storm on the first weekend in March will impact March numbers as well! How many people remember SARS five years ago? For two months people would not leave their property except to go to work. As a Company, we even talked about buying masks for people to wear when we showed properties. Sales were that bad. But the market fundamentals had not changed and the market resumed its upward trend after the SARS scare.
So where are we today? Market fundamentals have not changed. In fact we think the market is stronger today than at the end of last year. Forecasts for the Ontario economy suggest that growth may reach 2% this year as opposed to earlier forecasts of less than 1%. We can tell you that parts of Ontario will actually shrink which means that the GTA economy will probably grow by at least by 3%. Incomes are rising, and with a half percentage drop in variable mortgage rates, there are lots of buyers! How do we know? All our agents have qualified buyers lined up. The problem is that there are not a lot of listings to show them yet! The sales-to-listing ratio is currently 45% - a normal market is in the 25-35% range. The first sign of a changing market is when listings swamp the market. The second is when affordability is eroded. Neither exists in this market!! We are not na