The number one question asked by potential buyers is: when will we reach the bottom of the market? My answer is always the same: no one knows when the bottom of the market is reached until four months after the fact, when sales and prices are already rising and then it is too late. You will recall that last year we reported the peak of the house market was at the end of January and we identified that in May. The condo market peaked in July and we only discovered that by October. While sales as reported by the Toronto Real estate Board are still down for February 34% from February of '08, there are some positive signs emerging. In 2009, sales increased from January to February by 54%. In 2008, the month over month increase was just 18%. While active listings at the end of February are 19% higher than a year ago, new listings for the month were 3% lower than new listings for February in 2008. Does this mean the market is at the bottom? No, but we are closer than most people believe. With lower prices and record low mortgage rates, there has never been a better time to buy in the last ten years. And I can guarantee that many people will leave it too late and will jump into the market as prices are rising, mortgage rates are rising, and the listing inventory is decreasing!
In the Downtown Condo Market, sales for February were 24% lower than in February of 2008. On the Etobicoke Waterfront, condo sales were off by 28%. This was a little bit better than the overall market. Within the condo market, condo sales over one million dollars have really tailed off. In January there were no sales, in February there were 3 compared to 12 in February of 2008. This is certainly a sign that sales are not consistent across all price ranges!
Speaking of prices, let's look at sales at a recently completed building at Blue Jays Way and Front St., The Element by Tridel. The first unit we looked at was a Sub-Penthouse, two bedrooms, three baths, two balconies and tandem parking. It sold in 2007 for $950,000 and then again in 2008 just before the peak of the condo market for $1,170,000 a one year increase of 23%. At 2136 sq.ft, that translates to $547 per sq.ft. What would it sell for today? My guess is just over one million. A second property we examined was a two bedroom unit with three baths, parking, and a nice terrace. It sold for $387,000 in 2007 and then for $418,000 ten months later an increase of 8% but this was again just before the peak of the market. At just over 900 sq.ft, the price is $460 per sq.ft. Now this property would still sell for in excess of $400,000 today.
February was also a busy rental month. 193 one-bedroom and 92 two-bedroom units were leased. The most popular rental was a 1+1 bedroom with parking. On average, it rented for $1560. Bachelor units were going for $1150 and two-bedroom units with parking averaged $1975. Rental prices continue to be down about $50-75 per month from September. However, properties are starting to rent faster about 24 days as opposed to 30 last month.