This is a fair question to ask, especially if we look back and realize that there has been a continuous housing boom in Toronto for 12 years now.
Are there any buyers left?
Most active real estate agents will confess to having at least three or four buyers ready to act the moment they see a home they can afford. The thing is, just like a nasty cold that just won’t go away, there’s a constant listing shortage as well.
What is a listing shortage?
To the untrained person a “severe listing shortage” sounds like a gross exaggeration. If you take the time to visit Realtor.ca and look at the number of homes available for sale in any Toronto neighbourhood, there seems to be plenty of homes for buyers to choose from.
However, when taking a closer look at some of those homes, it becomes clear that the asking price is above what most homebuyers are willing to pay, even in this market where we are still seeing homes selling above the asking price. Consequently, the vast majority of those homes have been on the market for months now, just ‘sitting there’.
Is this a buyer or sellers market?
Home sales in February 2011, were 50 per cent higher when compared with February of 2009, during the recession. In the first half of March of this year, sales in the Greater Toronto Area were down by 5 per cent when compared with the same time in 2010.
For the month of February 2011, the average selling price transaction was $454,423, which was more than five per cent higher than the average selling price reported in February of 2010.
Will Toronto home prices ever drop?
So far, the Toronto market seems immune to the effect of rising oil prices, high levels of unemployment and ever-increasing taxes, just to name a few. Naturally, some of our buyer clients are hoping that the tables will soon turn and we will return to a buyer’s market with a full selection of more affordable homes.
Rosalin Smith- Carr and John Carr are Sales Representatives with Royal LePage/Johnston & Daniel Division and are regular contributors to the Muddy York blog. Their website can be found at www.primetorontorealestate.com