The Toronto Real Estate Board reported a record 9,967 Sales in the month of July 2009, up 28% from July 2008. At the same time, active listings fell an incredible 36% to 16,915 (from 26,543 the previous year). This has resulted in a 6% increase in prices from July 2008.
The big news continues to be centered around the sudden switch from a buyers market to a very strong sellers – with the strongest sales-to-listing ratio we have seen for years.
The graph below illustrates the listings-sales ratio for the past 4 years, and the numbers suggest that we been in a sellers market most of the last 4 years. As the graph shows, we have seen an alarming spike in listings-sales ratio (1 in every 1.7 homes sold, as opposed to 1 in every 4 in when we are in a balanced market).
In January of this year, we had a listing-sales-ratio of 13% – this means that for approximately 8 listings, only 1 had a buyer. In 6 short months, this has done a complete 180 – with every listing now potentially having multiple buyers. It was reported that 1 in every 7 listings in the month of July had a multiple offer. Incredible numbers given the fact that we are supposed to be in a recession.
The graph below illustrates the “gap” between listings and sales for the month of July in the past 6 years, and again illustrates the strength of the current market. The gap between the “blue line” and the “red” line is the difference between listings and sales. The graph clearly shows that the gap is usually twice as large in the month of July in past years.
So what do all these fancy graphs and numbers mean? It means that right now is an excellent time to sell your home. It means that we are having upward pressure on prices as demand is far greater than supply. If you are a buyer, patience is the name of the game. With a lack of inventory, finding that perfect home may take a little longer than expected, and your Real Estate Sales Professional should counsel you to this effect. As I have already stated in previous posts, if you find that perfect home, in this market you may not have that extra day or two to “think it over”.
The coming months will be interesting as the fall market will give us a better indication of whether or not the market will hold strong or begin to slow down. Your thoughts are strongly encouraged.
Until next time!
Roy Bhandari (B.Comm Hons)
Signature Service GMAC Real Estate