Summers Here!

It's mid June and I have had a very busy and productive spring having helped many buyers and sellers. The market also has come a long way since this time last year with prices on average up 13% since May 2009. Interestingly my client roster is a fair bit thinner for this point in June than is typical. Not that I'm complaining, as we have been on a torrid pace since the beginning of the year. A lighter work load allows me to catch my breath and reflect on the past few months and look ahead to those to come. Of course if you know anyone ready to buy or sell - be sure to send them my way...

Looking at the market data my client load seems consistent with what is happening in the broader market. It was interesting recently to chart out for a client the past five months of market activity as reported by the Toronto Real Estate Board (TREB). We entered the year with the inventory of available homes in January being 41% lower than the previous year and sales up 87%. At the end of May the Inventory of available homes was 18% higher than the year earlier period and sales were down 1%. It is important to note that Sales remained strong and it is the inventory side of things that has cooled the market to some degree. Ultimately the steam seems to have come out of the market and there is a return to a more reasonable and measured pace which is very healthy in my view.

This month so far sales volumes seem to be at a slower pace and some would suggest this is further evidence of a real slow down. I don't disagree, however I think what is happening is an early transition into a summer market where buyers are fewer and homes take longer to sell. I don't believe we are in for a broad pull back in the market as some have speculated. Tom Lebour the president of the Toronto Real Estate Board noted in the May Market update that a lot of people advanced their plans to stay ahead of expected rate increases... so it only follows that things will slow down for a short time now that the first rate hike has come and gone.

However given interest rates remain at historically low levels, the economy shows continued signs of strength (particularly in Ontario) and the employment rates have stabilized and have started to rebound I fully expect a healthy fall market. That being said I don't expect (and frankly hope we don't experience) a return to a sellers market with bidding wars as the norm. Rather I think we will see lower but healthy sales volumes and a good inventory available to absorb the buyers - I expect prices to move sideways at best and we may even experience a very modest pull back in prices with a return to modest appreciation in 2011. At the end of 2010 I do expect average prices will be up overall.

If you have any questions about current market conditions or Real Estate in general don't hesitate to reach out.....