Market update for Markham and Unionville for September 2010

If you look at the number of sales reported by The Toronto Real Estate Board for September 2010 of 6,310, and compare it to September 2009 at 8,196, a 23% drop, you would probably conclude that the real estate market has collapsed. No doubt some air was definitely let out of the real estate balloon in the TREB reporting area. The balloon might be softer but it’s still aloft. What I believe happened is that after coming off of the largest financial meltdown in history, the Canadian economy started recovering at a faster rate than our American friends to the south. This was due largely to the strength of the Canadian Banking System. Interest rates were still at an all time low, (and still are low as far as I’m concerned), so people who may have been scared off during the meltdown of 2008, started to buy homes again. By June 2009 we had reached the peak of the recovery in the real estate market with TREB reporting a record number of sales at 10,955. By June 2010 TREB sales reported softened to 8,442. In the June 2010 Market Watch Report, TREB president, Bill Johnston had this to say; “We experienced a record number of existing home sales during the first half of 2010, but these sales were weighted more towards the beginning of the year.” “The pace of home sales has moderated from record levels over the past two months with the prospect of higher mortgage rates.” Well the Bank of Canada did raise rates one quarter point on June 1st, and again on July 20th, and again on September 8th. For an explanation of Monetary Policy and how the key interest rates are set, go to:  http://bankofcanada.ca/en/monetary/target.html. I believe the 1st two rate increases had a lot to do with the number of sales on TREB dropping from 8,442 in June 2010 to 6,564 in July. I believe we’ve hit the low in sales in August at 6,232. September looked better at 6,310 sales and I believe it will continue to get better. One anomaly I did notice in TREB district N11 Markham Unionville was that the median price for detached homes for August 2010, hit a high of $621,150 where in July it had been $587,250 and in September $586,000. Again in N11 the # of detached home sales dropped from 155 in September 2009 to 100 this September. The number of available detached listings grew from 195 in September 2009 to 235 this September. With 40 more homes for buyers to look at, the average number of days on market (DOM) to sell went from 20 in September 2009 to 29 in September 2010. That was an improvement from August 2010 where the DOM was 36. In October 2009 DOM was 31. I have still seen well priced homes in demand neighbourhoods sell in a week but that is not the norm! Aside from the increase in the number of homes available for sale, another indication that we are moving more towards a buyer’s market is the average percent of list price obtained. For N11 detached homes in September 2010 the average was 97%, compared to 100% for September 2009. This means the home must be priced right or there’s a good chance it will take a much longer time to sell. I believe we are in a healthy “normal” market that will improve slowly as the economy improves. The next scheduled rate setting date for the Bank of Canada is October 19th, 2010. If you read between the lines of the September 8th press release from the Bank of Canada which said; “Any further reduction in monetary policy stimulus would need to be carefully considered in light of the unusual uncertainty surrounding the outlook.”  Translation! You’re not likely to see interest rates going up any time soon. Stable interest rates go far to promote confidence in home buyers to purchase a home. To read the BOC September 8th press release, go to http://bankofcanada.ca/en/fixed-dates/2010/rate_080910.html . To read a September 30th economic report from Mark Carney, Governor of The Bank of Canada, go to: http://bankofcanada.ca/en/press/2010/pr300910.html . You can also check out the TREB housing market charts for September 2010 at http://torontorealestateboard.com/consumer_info/housing_charts/index.htm  

Leslie Weir

Leslie Weir

Sales Representative
CENTURY 21 Leading Edge Realty Inc., Brokerage*
Contact Me

Tags