The numbers for August 2009 are in, and the story continues to revolve around the shortage of supply, and increasing demand leading to upward pressure on price.
In August, Toronto Real Estate Board reported 8,035 sales (up 27% from the previous year). The graph below illustrates the dramatic change in inventory that we have witnessed over the last 8 months. In January 2009, we had 28% more inventory available than in January 2008, whereas in August 2009 we had 37% less inventory.
The lack of inventory is changing the game for buyers. Eight months ago, buyers had their choice of whatever home they wanted. Not only was there an excess of supply, but buyers also commanded what prices they were willing to pay (more on prices a little later…). A stat revealed that in January, for every 1 buyer, there was 8 sellers. More recently, for every 1 seller, we seem to have 8 buyers. Myself and Amit are aggressively shopping with 4 buyers, but are unable to find what they are looking for due to a shortage of supply.
It is also important to see how this has effected price. The graph below illustrates the percentage change in price when compared to last year. Again, we have seen a dramatic turnaround. In January, prices were down 8% when compared to the previous year, and in August we are up 6%.
To illustrate just how much of a jump that is, we were recently at a clients BBQ who had purchased their home for $468,000 in January of this year. We noticed a SOLD sign across the street and found out that it sold for $573,000 and had 6 offers. What a terrific return on his investment.
Finally, the below graph displays the Active Listings-to-Sales ratio since January 2006. Again, we are seeing the very strong sellers market continue into August.
Toronto Real Estate Board is anticipating a strong fall market. If you have thought about selling your home, there is no better time than NOW. Homes are selling quicker, they are selling for more money and there are buyers waiting for new inventory.
Roy Bhandari
Sales Representative with Signature Service GMAC Real Estate
Archives:
60 Second Market Watch – July 2009 – Sellers Market back in full swing
60 Second Market Watch – June 2009 – TREB Reports Best June on Record
