The spring rebound expected by both sides of the housing debate appears to be in play. Condos prices in March ticked up from February. House prices in North York and Markham did the same; not so Richmond Hill. For the areas studied the overall view would be that prices are bouncing around with no pronounced up or downtrend.
This is in contrast to houses in Toronto core areas where location, lifestyle, and public transit are fuelling price gains. Contrast the gains with the 22% drop in March sales from a year ago, and we are seeing the effect of limited supply.
We have been keeping an eye on rising days-on-the-market as a leading indicator of price declines. The notable trendline belongs to 2 bedroom condos along central Highway 7, averaging a lengthy 51 days to sell the past 6 months. But note also that prices have been recovering over those 6 months. It would appear that sellers there are not under any pressure and can be very patient.
Canadian Business magazine asks, “Just how overvalued are Canadian homes?” And their answer, “It depends who you ask.” See Canadian Business’ summary on the right.
“… it seems like the sunniest forecasts come from realtors and banks who are active in mortgage lending; leave it to the depraved journalists … to envisage a fiery apocalypse in our future.”
Sell and rent?
What about selling, investing the proceeds, and renting? That’s what the homeowner in the Globe and Mail article, “Time to sell my house and rent?” (see link below) is contemplating. Read what a financial planner says about it.
Our best chance?
Economics 101 may yet save the housing market from a serious collapse, trending over the next few years in a soft-landing scenario. The major factor: rapidly declining new construction. In the first quarter of 2013 housing starts nationally were down 41% from a year ago – 18 % for single family and 62% for condos.
The overall picture remains one of declining sales but resilient prices. GTA total home sales were down 17% for March 2013 vs. year ago, and 14% for the quarter. Interestingly, the sales drop was a little higher for detached homes than for condos. At the same time, prices were up 1-4% in different areas, the biggest gain being in townhouses at 5%. This highlights the affordability factor – don’t want a highrise but can’t afford a detached.
The annual RBC poll reveals a dramatic drop in the number of Canadians expecting to buy a home within 2 years: a forty-four percent drop to 15% from 27% last year. However, 84% remained positive on real estate as an investment and a slim majority felt this was a good time to buy.
Maybe when the right one comes along at the right price.
Real Estate Sales Representative
call or text: 416 436-5851
Recent news stories:
Home buying set to tumble RBC poll TStar Mar 26
Time to sell my house and rent G&M Mar 27
GTA housing sales slump 17 per cent in March, but prices continue to climb TStar Apr 3
Housing heads into spring market on sour note G&M Apr 3
Real estate's late spring Sales rebound fails to blossom G&M Apr 3
Why the latest housing numbers have been met with relief G&M Apr 9