April showers did not deter buyers from another intense month of bidding wars, as most of you buyers in the market know, almost all offers were going into bidding wars with prices hitting upwards of $40,000-$50,000 over listing price. It has been a very tough market for buyers to buy what they want in the price ranges they thought they could afford before getting priced out of the neighborhoods.. This affordability issue is pushing buyers farther away from the most sought after areas they most wanted to reside in. My prediction moving forward is that this sellers market will continue to push prices up since there is a shortage of freehold houses on the market and until interest rates start hitting debt levels that consumers cannot handle, this price increase will remain. By the time interest rates do rise the price levels would have already hit a precedence which even for the buyers sitting on the side lines will end up paying a way higher price then if they bought today.
Greater Toronto REALTORS® reported 10,350 transactions through the TorontoMLS system in April 2012. This level of sales was 18 per cent
higher than the 8,778 firm deals reported in April 2011. The strongest sales growth was reported in the single-detached market segment, with transactions of this home type up by 22 per cent compared to a year ago. “Interest in single-detached homes has been very high, both in the City of Toronto and surrounding regions. Growth in single-detached listings has not kept up with demand, which means competition between buyers in this market segment increased. With this in mind, it was no surprise that the strongest annual price increase was also experienced in the single-detached segment,” said Toronto Real Estate Board President, Richard Silver.
The average price for April 2012 transactions was $517,556 – up 8.5 per cent compared to April 2011. While price growth was strongest for single-detached homes, the better-supplied condominium apartment segment experienced a more moderate annual rate of price growth, at four per cent.
“Monthly mortgage payments remain affordable for home buyers in the Greater Toronto Area. While interest rates are generally expected to increase over the next two years, the extent and timing of rate hikes has been thrown into question by slower than expected economic growth in the first quarter of this year. On net, borrowing costs are expected to remain a positive factor influencing home sales through 2012,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.