All year we have been looking at sales statistics in comparison to last year - 2008. With July sales 28% higher than the same month last year, and year-to date- sales almost dead even, it is a certainty that this year's sales will outperform 2008 by year end. Last year the market started to collapse by the end of September and the signs were already telling by that time. We had 26,000 active listings and we added 15,000 new listings that July.
Move forward to this July, we have only 17,000 active listings and we added 12,000 new listings in July.
Now look at July 2007. There were 20,000 active listings and we added 13,000 new listings that July.
When you do the comparisons, we are starting to look more like 2007 than 2008! Now the experts will tell you that there are less potential buyers today because of unemployment and the economy. But today there are also lower mortgage rates, meaning more people can qualify for properties, and I would also guess that more people are living in Toronto today than two years ago.
The conclusion to be reached is that while we will not hit 2007 sales volumes, 2009 prices will remain higher than in 2007 primarily because we have a lower number of listings!
Buyers who waited to find lower prices have missed this round. On average, prices increased by 10% in 2007. They declined by about 5-10% in late 2008 and early 2009. But since March, real estate prices have recovered all of the drop and are now higher than ever before.
Buyers looking for any correction in real estate prices will now have to wait for at least another 3+ years and even then there is no guaranty!