Sales and New Listings Down, Prices Up
Greater Toronto Realtors reported 6,232 sales in August 2010. This represented a 22% decrease compared to 8,035 sales recored during the same period in 2009. New listings decreased by 1% year-over-year to 10,488 while active listings increased by 25% to 19,563.
“The prospect of interest rate hikes and new mortgage lending rules prompted some households to purchase a home sooner than they otherwise would have this year. The result has been a larger than normal dip in sales over the summer months. With this said, it is important to recognize that sales for the year are 5.3% higher than in 2009,” said Toronto Real Estate Board President Bill Johnston.
The average price for August transactions was $411,012- up 6% compared to the average of $387,921 reported in August 2009. Average prices year-to-date are up 13% compared with the same period last year.
” Market conditions have remained tight enough to support higher home prices in comparison to last year. Under current mortgage lending standards, a household earning the average income in the GTA can comfortably afford the mortgage payments on an average priced home. Market conditions and the affordability picture would have to change dramatically before a sustained drop in the average selling price would take place,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.
The sales to listing ratio for the month of August was at 31.9%, still in seller’s market territory. Average days on the market for August 2010 increased to 36 days compared to 30 days the same time last year. Sales of condo aprtments represented 26% of the total sales for August up from 23.6% in July.
My Sept/Oct 2010 real estate newsletter is hot off the press. Check it out:
Did you know…..
* The Bank of Canada increased the bank rate for the third consecutive time on Sept.8 to1.0% which is consistent with their objective of achieving a 2% inflation target by next year.
Remember when the bank rate was at .25% not too long ago?
* More than two-thirds of Canadian households are homeowners. The home ownership rate has been rising steadily since the end of the Second World War. including a period when mortgage rates topped 20% in 1981. Wow!
* Mortgage insurance is mandatory if your down payment is less than 20%. The premium is calculated based on the mortgage amount. The premium is added onto your mortgage and amortized or it can be paid as a lump sum.
* Under the Federal Government’s Home Buyers Plan you can borrow up to $25,000 of your RRSP money, tax-free to put towards the purchase of your first home. The money is paid back interest free over 15 years.
* You can also take advantage of a first time home buyer’s federal tax credit of up to $750 to help with your closing costs.
* Four BIG money mistakes of first time home buyers are:
1. Spending the maximum of your mortgage preapproval on housing.
2. Not getting prequalified early enough.
3. Misunderstanding the importance of a high credit score.
4. Choosing the wrong mortgage product.
* Contrary to popular belief there is no strong correlation between rising interest rates and lower house prices. Historical data has shown that rates and house prices move together. Higher rates do affect affordability but rising rates generally occur in an improving economy with positive economic momentum .
* Do you have want to know what approximate maximum financing a lender will provide to you?
Your G.T.A Newsletter for September/October 2010:
Please contact me at 416-520-6746 or David@TorontoRealEstate.ca
Is it a good time for YOU to buy a home?
Who’s in the driver’s seat now? Buyers or Sellers?
Check out this article in the Toronto Star August 27,2010:
Interest rates are now below 4% again for a 5yr fixed rate mortgage.
Prices have leveled off from the craziness seen in the first quarter of the year.
Do you have questions about the real estate market?
Do you require FREE information about the home buying process to get you pointed in the right direction?
Register now for the FEW remaining seats at our popular Home Buyer Bootcamp September 16,2010.:
Free information with No Obligation. Can’t beat that offer.